What is the effect of the tax on the monopolists profits

Reference no: EM13669009

"Company X has a demand for its services given by p (q ) = 80 0.5q . Its cost function is given by c(q ) = 0.125q 2 . In the past it was not taxed, but now it must pay a tax of 10 dollars per unit of output. a. Calculate the monopolists profit-maximizing output and price and verify that the secondorder derivative condition holds at your solution. b. By how much will the monopolist increase its price when the tax is imposed? c. What is the effect of the tax on the monopolists profits?"

Reference no: EM13669009

Questions Cloud

Which years were years of inflation : Which years were years of inflation?

Functions of the market for a good : Functions of the market for a good

Describe a demand curve : Describe a demand curve

Given the same minimum wage and training program : Given the same minimum wage and training program

What is the effect of the tax on the monopolists profits : What is the effect of the tax on the monopolists profits?

Briefly describe the relationship between the three rates : Briefly describe the relationship between the three rates.

Face value are currently selling : One-month treasury bills with a $10,000 face value are currently selling

Describe how an open market sale of t-bills : Describe how an open market sale of T-Bills, carried out by the central bank, affects interest rates, the banking system and real economic activity

Midlevel wines consumed primarily in north america : Golden Star Winery produces midlevel wines consumed primarily in North America

User Account

All Pages