A profit tax on a monopolist will have no effect on the profit maximizing price and quantity will have no effect on the profit maximizing quantity but the price is going to be higher. O will have no effect on the profit maximizing price but the quantity is going to be lower. O will make the price higher and the quantity is lower.

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter9: Monopoly
Section: Chapter Questions
Problem 33P: Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the...
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A profit tax on a monopolist
O will have no effect on the profit maximizing price and quantity
O will have no effect on the profit maximizing quantity but the price is going to be higher.
O will have no effect on the profit maximizing price but the quantity is going to be lower.
O will make the price higher and the quantity is lower.
Transcribed Image Text:A profit tax on a monopolist O will have no effect on the profit maximizing price and quantity O will have no effect on the profit maximizing quantity but the price is going to be higher. O will have no effect on the profit maximizing price but the quantity is going to be lower. O will make the price higher and the quantity is lower.
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