The taxes for various income. Introduction: Progressive tax rate: It is defined as the system wherein taxes increase as the income increases, wherein high-income taxpayers pay more taxes as compared to the low-income taxpayers. Regressive tax rate: It is defined as the system wherein the taxes decrease as the income increases, wherein high-income taxpayers pay fewer taxes as compared to low-income taxpayers Proportionate tax rate: It is defined as the system wherein a flat tax rate is charged to all taxpayers irrespective of the income earned by them. Marginal tax rate: The tax paid on an additional dollar of the income is termed as the Marginal tax rate. In other words, it is an incremental tax paid on the incremental income

Question

The following diagram illustrates the demand and marginal revenue curves facing a monopoly in an industry with no economies or diseconomies of scale. In the short and long run, MC = ATC. a. Calculate the values of profit, consumer surplus, and deadweight loss, and illustrate these on the graph. b. Repeat the calculations in part a, but now assume the monopoly is able to practice perfect price discrimination.

Answer 1

Question

Chapter 3, Problem 3.10P

To determine

The taxes for various income.

Introduction:

Progressive tax rate: It is defined as the system wherein taxes increase as the income increases, wherein high-income taxpayers pay more taxes as compared to the low-income taxpayers.

Regressive tax rate: It is defined as the system wherein the taxes decrease as the income increases, wherein high-income taxpayers pay fewer taxes as compared to low-income taxpayers

Proportionate tax rate: It is defined as the system wherein a flat tax rate is charged to all taxpayers irrespective of the income earned by them.

Marginal tax rate: The tax paid on an additional dollar of the income is termed as the Marginal tax rate. In other words, it is an incremental tax paid on the incremental income

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