Assume a single-price monopolist has an inverse market demand curve given by P(Q)=300-0.5Q, and has a cost curve: C(Q)=125+20Q+0.5Q2. We already know that Monopolist will provide 140 units, Economic profit is 19475, and Economic Rent is 190. If the impact of a 35% ad valorem tax imposed on the consumers in the market. Then: Q1: What is the equilibrium quantity will be sold in the after-tax equilibrium? Q2: What are the economic rents of the monopolist?
Assume a single-price monopolist has an inverse market demand curve given by P(Q)=300-0.5Q, and has a cost curve: C(Q)=125+20Q+0.5Q2. We already know that Monopolist will provide 140 units, Economic profit is 19475, and Economic Rent is 190. If the impact of a 35% ad valorem tax imposed on the consumers in the market. Then: Q1: What is the equilibrium quantity will be sold in the after-tax equilibrium? Q2: What are the economic rents of the monopolist?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Assume a single-
We already know that Monopolist will provide 140 units, Economic profit is 19475, and Economic Rent is 190.
If the impact of a 35% ad valorem tax imposed on the consumers in the market. Then:
Q1: What is the
Q2: What are the economic rents of the monopolist?
Expert Solution
Given
P(Q)=300-0.5Q
Q = 600 - 2P
C(Q)=125+20Q+0.5Q2.
MC = dC/dQ
MC = 20 + Q
Quantity = 140 units
Economic profit is 19475
Economic Rent is 190
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