Hot Air Balloon Rides is a single-price monopoly. Columns 1 and 2 of the table set out the market demand schedule and columns 2 and 3 set out the total cost schedule. Now suppose that the government places a fixed tax on Hot Air's profit of $50 a month. Calculate Hot Air's new profit-maximizing output and price. When Hot Air is producing its new profit-maximizing output, the number of rides it produces is a month and the profit-maximizing price of a ride is $. >>> Answer to 1 decimal place. Price (dollars per ride) 180 170 160 150 140 130 Quantity (rides per month) 0 1 2 3 4 5 Total cost (dollars per month) 25 150 285 430 585 750
Hot Air Balloon Rides is a single-price monopoly. Columns 1 and 2 of the table set out the market demand schedule and columns 2 and 3 set out the total cost schedule. Now suppose that the government places a fixed tax on Hot Air's profit of $50 a month. Calculate Hot Air's new profit-maximizing output and price. When Hot Air is producing its new profit-maximizing output, the number of rides it produces is a month and the profit-maximizing price of a ride is $. >>> Answer to 1 decimal place. Price (dollars per ride) 180 170 160 150 140 130 Quantity (rides per month) 0 1 2 3 4 5 Total cost (dollars per month) 25 150 285 430 585 750
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter23: Monopoly
Section: Chapter Questions
Problem 2WNG
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Question
![Hot Air Balloon Rides is a single-price monopoly.
Columns 1 and 2 of the table set out the market demand
schedule and columns 2 and 3 set out the total cost
schedule.
Now suppose that the government places a fixed tax on
Hot Air's profit of $50 a month.
Calculate Hot Air's new profit-maximizing output and price.
When Hot Air is producing its new profit-maximizing output,
the number of rides it produces is a month and the
profit-maximizing price of a ride is $
>>> Answer to 1 decimal place.
C
Price
(dollars
per ride)
180
170
160
150
140
130
Quantity
(rides
per month)
0
G A WNIO
2
3
4
5
Total cost
(dollars
per month)
25
150
285
430
585
750](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2882f0b5-9a0b-4acc-93c2-31aa00d9296f%2F5119b8a0-741b-472b-a2c8-8ecf64abce25%2Fn2zvssm_processed.png&w=3840&q=75)
Transcribed Image Text:Hot Air Balloon Rides is a single-price monopoly.
Columns 1 and 2 of the table set out the market demand
schedule and columns 2 and 3 set out the total cost
schedule.
Now suppose that the government places a fixed tax on
Hot Air's profit of $50 a month.
Calculate Hot Air's new profit-maximizing output and price.
When Hot Air is producing its new profit-maximizing output,
the number of rides it produces is a month and the
profit-maximizing price of a ride is $
>>> Answer to 1 decimal place.
C
Price
(dollars
per ride)
180
170
160
150
140
130
Quantity
(rides
per month)
0
G A WNIO
2
3
4
5
Total cost
(dollars
per month)
25
150
285
430
585
750
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Follow up question
![When the government places a fixed tax on Hot Air's profit
of $50 a month, the profit-maximizing output
decreases
and the profit-maximizing price
does not change
does not change
increases
decreases
= my instructor](https://content.bartleby.com/qna-images/question/2882f0b5-9a0b-4acc-93c2-31aa00d9296f/3ffc45f2-925e-4897-928d-2a93aeb956fd/w2vi2w_thumbnail.png)
Transcribed Image Text:When the government places a fixed tax on Hot Air's profit
of $50 a month, the profit-maximizing output
decreases
and the profit-maximizing price
does not change
does not change
increases
decreases
= my instructor
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