(c) If you wanted to choose a price ceiling for this monopolist so as to maximize consumer plus producer surplus, what price ceiling should you choose? How much output will the monopolist produce at this price ceiling? Explain your calculations. (d) Suppose that you impose a specific tax of £20 per unit of output. What will be the monopolistť's profit maximizing level of output? Explain your derivation and comment on the impact on output.
(c) If you wanted to choose a price ceiling for this monopolist so as to maximize consumer plus producer surplus, what price ceiling should you choose? How much output will the monopolist produce at this price ceiling? Explain your calculations. (d) Suppose that you impose a specific tax of £20 per unit of output. What will be the monopolistť's profit maximizing level of output? Explain your derivation and comment on the impact on output.
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.2P
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