Assume that the willingness to pay for a particular shirt is 125 and that producing that shirt has amarginal cost of 30. In addition, a tax of 20 is levied on the buyer of this shirt.How much does the purchase or sale of this shirt increase overall economic welfare?Answer: What is the profit for the perfectly price discriminatory monopoly (1st degree price discrimination) with thefollowing demand:Q = 6 - P (P is the price and Q is the quantity.) Andthe following total costs: TK (Q) = Q2+ 2Answer:

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume that the willingness to pay for a particular shirt is 125 and that producing that shirt has a marginal cost of 30. In addition, a tax of 20 is levied on the buyer of this shirt. How much does the purchase or sale of this shirt increase overall economic welfare?