(c) If you wanted to price regulate this monopolist so as to maximise consumer plus producer surplus, what price ceiling would you impose? How much output will the monopolist produce at this price ceiling? Explain your calculations. (d) Suppose that you impose a specific tax of £20 per unit of output. What would its profit maximising level of output be? Explain your derivation and comment on the impact on output.

(c) If you wanted to price regulate this monopolist so as to maximise consumer plus producer surplus, what price ceiling would you impose? How much output will the monopolist produce at this price ceiling? Explain your calculations. (d) Suppose that you impose a specific tax of £20 per unit of output. What would its profit maximising level of output be? Explain your derivation and comment on the impact on output.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.2P

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