A monopolist with constant marginal costs faces a demand curve with a constant elasticity of demand and does not practice price discrimination. If the government imposes a tax of $1 per unit of goods sold by the monopolist, the monopolist will increase his price by more than $1 per unit. True False

A monopolist with constant marginal costs faces a demand curve with a constant elasticity of demand and does not practice price discrimination. If the government imposes a tax of $1 per unit of goods sold by the monopolist, the monopolist will increase his price by more than $1 per unit. True False

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A monopolist with constant marginal costs faces a demand curve with a constant
elasticity of demand and does not practice price discrimination. If the government
imposes a tax of $1 per unit of goods sold by the monopolist, the monopolist will
increase his price by more than $1 per unit.
True
False
In work-out problem 25.2, if the demand for pigeon pies is given by p(y) = 140 - y/4,
then the level of output that will maximize Peter's profit is
560
284
None of these choices
840
56

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