. A monopolist faces the inverse demand = 1000 - 10 and has the cost f unction...
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Question:
. A monopolist faces the inverse demand = 1000 - 10 and has the cost f unction C(Q) = 200Q + 10Q!. (5 points each) a) Find the equilibrium quantity and price, and the maximal profit. b) The government wants to introduce a lump-sum tax on the monopolist. If he/she produces any positive amount, a fixed amount of one-time tax is imposed. What is the possible maximum tax amount that does not run t he firm's incentives to continue production? c) The government has an alternative program, that collects $10 per unit. Fi nd the equilibrium quantity and price, and the maximal profit. d) Compare the welfare effects of the two tax programs and provide interpretation.
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