Question: 5 . A monopoly with a constant marginal cost c has a prot maximizing price of p 1 . It faces a constant elasticity demand

5. A monopoly with a constant marginal cost c has a prot maximizing price of p1. It faces a constant elasticity demand curve with elasticity . After the government applies a tax of $1 per unit, its price is p2. What is the change p2 p1 in terms of ? How much does the price rise if the demand elasticity is 2?

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