Problem 2: In problem 1, the monopolist sells a product with a total cost function: TC=...

 

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Problem 2: In problem 1, the monopolist sells a product with a total cost function: TC= 1,000+500Q+Q². 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) Problem 2: In problem 1, the monopolist sells a product with a total cost function: TC= 1,000+500Q+Q². 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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a With the quadratic total cost function TC 1000 500Q Q2 and ... View the full answer