Amount of the per-unit tax
Question: A per-unit tax t>0 is levied on the output of a monopoly. The monopolist faces demand q=p^-e, e>1, and has constant average costs. Show that the monopolist will increase price by more than the amount of the per-unit tax.
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Why is the government so quick to regulate monopolies and potential monopolies? What are the major concerns and evils that arise from this market structure?
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A per-unit tax t>0 is levied on the output of a monopoly. The monopolist faces demand q=p^-e, e>1, and has constant average costs. Show that the monopolist will increase price by more than the amount of the per-unit tax.
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Question: Give detailed analysis of pricing strategies specifically related to each kind of market structures:
Identify a business in your local community. This can be your current place of employment or a business with which you are familiar.
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