Help, economics, Microeconomics

A monopolist faces the inverse demand for its output:
p = 30 – Q The monopolist also has a constant marginal and average cost of $4/unit. The government is seeking ways to collect tax revenue from the monopolist and faces two proposals:
i. Impose a specific tax of t on the monopolist.
ii. Impose an ad valorem tax of a on the monopolist. a. Suppose the government imposes a 20% ad valorem tax on the monopolist. What price and quantity does the monopolist choose and how much revenue does the government generate from the tax? b. Rather than an ad valorem tax, what is the government’s revenue from a specific tax of t imposed on the monopolist? Your answer should be in terms of ‘t’. c. Show that a specific tax of $3.70/unit generates the same revenue as a 20% ad valorem tax (approximately).
Posted Date: 3/15/2012 7:14:30 PM | Location : United States







Related Discussions:- Help, economics, Assignment Help, Ask Question on Help, economics, Get Answer, Expert's Help, Help, economics Discussions

Write discussion on Help, economics
Your posts are moderated
Related Questions
what is mrs

Major air pollutants can be sub divided into 2 catexampleories: Inorganic gases and particular gases. (A) Inorganic gases 1. Carbon monoxide (CO) CO is a colourless, lethal gas

Demand Function is Homogeneous of Degree Zero: Mathematical Presentation  we will show that demand function is homogeneous of degree zero in prices and money income. In o

Determinants of the price elasticity of demand are explained below: 1. Number of close substitutes present within the market - The more and closer substitutes available in the

Distributive Bargaining An approach to negotiation that finds to divide up a fixed amount of resources.

Q. Define Migration in Microeconomics? Migration:It's the movement of human beings from one country or region to another. Sometimes migration is motivated by economic factors (

Ali Pizza’s production function is shown in the table above. Ali currently operates Plant2. He hires workers at a wage rate of $50 a day and his total fixed cost is $150. a) Calcul

arguments in favour and against of Theory of Profit Maximization

what is pooling equilibrium

Insurance - Risk averse are willing to pay to keep away from risk. - If cost of insurance equals expected loss, risk averse people will buy sufficient insurance to totally r