[Q: 11-4660750] Consider a monopoly that faces an inverse demand curve with a constant elasticity, p(Q) = Q* , and that has a constant marginal cost, MC(Q) = m. If the own-price elasticity is e = - 6.9, marginal costs are m= 7, and the government imposes a specific tax on the monopolist, what will be the tax incidence on consumers? O A. 65.42% ОВ. 38.1% OC. the same incidence as when the tax is imposed on a perfectly competitive firm. O D. 50% O E. 116.95%

[Q: 11-4660750] Consider a monopoly that faces an inverse demand curve with a constant elasticity, p(Q) = Q* , and that has a constant marginal cost, MC(Q) = m. If the own-price elasticity is e = - 6.9, marginal costs are m= 7, and the government imposes a specific tax on the monopolist, what will be the tax incidence on consumers? O A. 65.42% ОВ. 38.1% OC. the same incidence as when the tax is imposed on a perfectly competitive firm. O D. 50% O E. 116.95%

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.9P

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