3.4 If the inverse demand function is p = 150 - 2Q and the marginal cost is...

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3.4 If the inverse demand function is p = 150 - 2Q and the marginal cost is constant at 30, how does charging the monopoly a specific tax of t = 20 per unit affect price and quantity and the surplus of consumers, the monopoly, and society (where society’s surplus includes the tax revenue)? What is the incidence of the tax on consumers? (Hint: See Q&A 9.3.)

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Managerial Economics And Strategy

ISBN: 9780135640944

2nd Global Edition

Authors: Jeffrey M. Perloff, James A. Brander

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