Microeconomics (12th Edition) (Pearson Series in Economics)
Microeconomics (12th Edition) (Pearson Series in Economics)
12th Edition
ISBN: 9780133872293
Author: Michael Parkin
Publisher: PEARSON
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Chapter 6.3, Problem 1RQ

How does the elasticity of demand influence the incidence of a tax, the tax revenue, and the deadweight loss?

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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.
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