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    Tax and monopoly

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    A per-unit tax t>0 is levied on the output of a monopoly. The monopolist faces demand q=p^-e, e>1, and has constant average costs. Show that the monopolist will increase price by more than the amount of the per-unit tax.

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    https://brainmass.com/economics/monopolies/tax-and-monopoly-345701

    Solution Summary

    Tax and monopoly issues are clearly explained.

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