Question: For commodity X , average cost is equal to marginal cost at every level of output. Assuming that the market for X is competitive and

For commodity X , average cost is equal to marginal cost at every level of output. Assuming that the market for X is competitive and the demand curve is linear, analyze the effects when a unit tax of u dollars is imposed. Now analyze the effects of the same tax assuming that the market for X is a monopoly. Discuss the differences.

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