6) Show a monopoly graph and show the elastic and inelastic zones are of the firm's demand curve. (You don't have to show anything but P=AR=D and MR on this graph).
6) Show a monopoly graph and show the elastic and inelastic zones are of the firm's demand curve. (You don't have to show anything but P=AR=D and MR on this graph).
Chapter13: Monopoly And Antitrust
Section: Chapter Questions
Problem 7P
Related questions
Question
Question 6
![1) Explain the difference between a per unit tax and a
lump sum tax:
2) Explain the difference between a subsidy and a tax.
3) Show (graphically) what impact a per unit tax would
have on a monopoly. What would happen to the firms price
and quantity if a per unit tax was used.
4) Show (graphically) what impact a lump sum tax would
have on a monopoly. Would the firm's price and quantity
change? Would the firm's profit change after the use of
the tax?
5) Show (graphically) what impact a per unit subsidy
would have on a monopoly. What would happen to the
firms price and quantity if a per unit subsidy was used.
6) Show a monopoly graph and show the elastic and
inelastic zones are of the firm's demand curve. (You don't
have to show anything but P=AR=D and MR on this graph).
7) Sometimes the government feels that they need to
regulate a monopoly. They might try to tax the monopoly
(which probably wouldn't work well) or they may decide to
split the monopoly firm into two different competing
businesses. Another idea would be to tell the monopoly
that they can only earn a "fair return." Show what a fair
return would look like graphically for the monopoly.
8) Show a monopoly graph and show the area of
consumer surplus, producer surplus and deadweight loss.
If a lump sum tax was used on the monopoly would the
area of consumer surplus, producer surplus or deadweight
loss change?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F76111a5e-aa2f-4b1d-a137-e7fe515d18ac%2F2cf8c679-3e5e-481d-9d5f-cef78825e076%2Fj9jrks_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1) Explain the difference between a per unit tax and a
lump sum tax:
2) Explain the difference between a subsidy and a tax.
3) Show (graphically) what impact a per unit tax would
have on a monopoly. What would happen to the firms price
and quantity if a per unit tax was used.
4) Show (graphically) what impact a lump sum tax would
have on a monopoly. Would the firm's price and quantity
change? Would the firm's profit change after the use of
the tax?
5) Show (graphically) what impact a per unit subsidy
would have on a monopoly. What would happen to the
firms price and quantity if a per unit subsidy was used.
6) Show a monopoly graph and show the elastic and
inelastic zones are of the firm's demand curve. (You don't
have to show anything but P=AR=D and MR on this graph).
7) Sometimes the government feels that they need to
regulate a monopoly. They might try to tax the monopoly
(which probably wouldn't work well) or they may decide to
split the monopoly firm into two different competing
businesses. Another idea would be to tell the monopoly
that they can only earn a "fair return." Show what a fair
return would look like graphically for the monopoly.
8) Show a monopoly graph and show the area of
consumer surplus, producer surplus and deadweight loss.
If a lump sum tax was used on the monopoly would the
area of consumer surplus, producer surplus or deadweight
loss change?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Exploring Economics](https://www.bartleby.com/isbn_cover_images/9781544336329/9781544336329_smallCoverImage.jpg)
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
![Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337617383/9781337617383_smallCoverImage.gif)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
![Microeconomics](https://www.bartleby.com/isbn_cover_images/9781337617406/9781337617406_smallCoverImage.gif)
![Exploring Economics](https://www.bartleby.com/isbn_cover_images/9781544336329/9781544336329_smallCoverImage.jpg)
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
![Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337617383/9781337617383_smallCoverImage.gif)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
![Microeconomics](https://www.bartleby.com/isbn_cover_images/9781337617406/9781337617406_smallCoverImage.gif)