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10. [3 Marks Assume a standard single-price monopolist. What will be the result of the introduction of a per-unit tax paid by the monopolist?! A. CS decreases. PS decreases. TS decreases. B. CS decreases. PS decreases. TS may increase or decrease. C. CS decreases. PS may increase or decrease. TS decreases. D. CS decreases. PS may increase or decrease. TS may increase or decrease. E. CS does not change. PS decreases. TS may increase or decrease.

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Keith Leannon
Keith LeannonLv2
25 Mar 2018
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Related questions

1. Assume every buyer purchases only one unit of a product, which forms the market demand P = 650 - 20. The monopoly firm has constant marginal cost at 50 and zero fixed cost. You may find it useful to draw your diagram in part (d) as you work through this question. 1. (a) Show your step-by-step calculations of the profit-maximizing output Qs and price Ps, profits Ts, consumer surplus CSs, producer surplus PSs, and deadweight loss DWL, if this monopoly firm is the least powerful type of monopoly. (18 marks) ls 150 Ps 350 TS 45,000 CS 22,500 PS 45,000 DW Lแป™ 22,500 1. (b) Show your step-by-step calculations of the profit-maximizing output Qp, profits tip, consumer surplus Sp, producer surplus PSp, and deadweight loss DWLp if this monopoly firm is the most powerful type of monopoly. (15 marks) Op 300 Tp 90,000 0 PSp 90,000 DWL, 0 1. (c) Use your results to explain the trade-off between efficiency and equity when there is only one firm serving all the consumers in the market and it is not regulated by the government to protect the interests of the consumers. (7 marks) 1. (d) Plot all your results in a properly labeled diagram. (5 marks) 650 P = 350 MR D = MRP MC = AC Qs = 150 Qp = 300 = Qc Q

15. [3 Marks] Assume a standard competitive market (upward sloping supply, downward sloping supply) where all benefits of an item go the the buyer and all costs are borne by the seller. Which of the following is true about an increase in a per-unit tax? A. TS will 1; GS may for t. B. TS will \; GS will t. C. TS will ; GS will 1. D. TS may for t.; GS may for E. TS may for t.; GS will 1.

17. [3 Marks Movies and concerts are both normal goods. Cross-price elastcity between movies and concerts is positive. What is the result of an increase in income? (Notation: MU, is the utility you got from your unit of u in a particular period.) A. Both MU movie and MU concert increase. B. Both MU movie and MU concert decrease. C. Total utility decreases. D. MU movie may increase or decrease, and MU concert changes in the same direction. E. MUmovie may increase or decrease, and MU concert changes in the opposite direction.

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