Markbury is a monopoly selling widgets. If the government imposes a $100 000 tax on every monopolistic firm in the country, then Select one: a. Markbury’s annual profit will no change since its marginal cost is unchanged b. Markbury’s annual profit will fall by $100 000 since its marginal cost would rise by $100 000 c. Markbury’s annual profit will fall by less than $100 000 since its marginal cost would rise by less than $100 000 d. Markbury’s annual profit will fall by $100 000 but its marginal cost will not change e. The impact on Markbury’s profit is difficult ascertain, without more information
Markbury is a monopoly selling widgets. If the government imposes a $100 000 tax on every monopolistic firm in the country, then Select one: a. Markbury’s annual profit will no change since its marginal cost is unchanged b. Markbury’s annual profit will fall by $100 000 since its marginal cost would rise by $100 000 c. Markbury’s annual profit will fall by less than $100 000 since its marginal cost would rise by less than $100 000 d. Markbury’s annual profit will fall by $100 000 but its marginal cost will not change e. The impact on Markbury’s profit is difficult ascertain, without more information
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Markbury is a monopoly selling widgets. If the government imposes a $100 000 tax on every monopolistic firm in the country, then
Select one:
a. Markbury’s annual profit will no change since its marginal cost is unchanged
b. Markbury’s annual profit will fall by $100 000 since its marginal cost would rise by $100 000
c. Markbury’s annual profit will fall by less than $100 000 since its marginal cost would rise by less than $100 000
d. Markbury’s annual profit will fall by $100 000 but its marginal cost will not change
e. The impact on Markbury’s profit is difficult ascertain, without more information
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