Question
If the inverse demand curve is p=140Q and the marginal cost is constant at $10, how does charging the monopoly a specific tax of =$6
If the inverse demand curve is p=140Q and the marginal cost is constant at $10, how does charging the monopoly a specific tax of =$6 per unit affect the monopoly optimum and the welfare ofconsumers, themonopoly, and society(where society's welfare includes the taxrevenue)? What is the incidence of the tax on consumers? As a result of thetax, the profit-maximizing quantity _______ (increases/decreases) by ______ units and the profit-maximizing price ________ (decreases/increases) by ________
(Enter numeric responses using real numbers rounded to two decimalplaces.)
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