If a monopolist has constant marginal cost MC = 20 and faces demand p = 80 - Q, what is the effect on consumer surplus of a $5 per-unit tax on sellers? Is the tax revenue collected less than, equal to, or greater than the consumer surplus loss plus the reduction in profits?

If a monopolist has constant marginal cost MC = 20 and faces demand p = 80 - Q, what is the effect on consumer surplus of a $5 per-unit tax on sellers? Is the tax revenue collected less than, equal to, or greater than the consumer surplus loss plus the reduction in profits?

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter15: Monopoly

Section15.3: The Welfare Cost Of Monopolies

Problem 3QQ

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If a monopolist has constant marginal cost MC = 20 and faces demand p = 80 - Q, what
is the effect on consumer surplus of a $5 per-unit tax on sellers? Is the tax revenue
collected less than, equal to, or greater than the consumer surplus loss plus the
reduction in profits?

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