Question: Problem 2: In problem 1, the monopolist sells a product with a total cost function: TC= 1,000+500Q+Q. The market demand curve is given by

Problem 2: In problem 1, the monopolist sells a product with a

Problem 2: In problem 1, the monopolist sells a product with a total cost function: TC= 1,000+500Q+Q. The market demand curve is given by the equation: Q-500-0.25P But now assume that the government imposes a $100 per unit tax on Q. What price and quantity would be expected if the firm is allowed to operate unregulated except for the imposed tax? Show the tax result on your graph of Problem 1. Denote P, Q, and MC. (b)

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