From the following figure referring to a natural monopolist, indicate (a) the be
ID: 2506654 • Letter: F
Question
From the following figure referring to a natural monopolist, indicate (a) the best level of output, price, and profits per unit and in total for the monopolist, (b) the best level of output and price with a lump sum tax that would eliminate all the monopolist's profits, (c)the best level of output, price, and profits per unit and in total with a $3 per unit tax collected from the monopolist, and (d) the best level of output and profit per unit and in total if the government sets the price of the product or service at $ 10. (e) Which is the best method of cont rolling monopoly power? Why? (See Figure 13-5.)
Explanation / Answer
a)the best level of output, price, and profits per unit and in total for the monopolist,is given by CURVE MC.
B) the best level of output and price with a lump sum tax that would eliminate all the monopolist's profits,CURVE AC.
C)the best level of output, price, and profits per unit and in total with a $3 per unit tax collected from the monopolist,,CURVE D.
D)the best level of output and profit per unit and in total if the government sets the price of the product or service at $ 10,CURVE AC.
E) the best method of cont rolling monopoly power,CURVE MR.
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