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In a monopolistically competitive market, the government applies a specific tax of $1 per unit of output. What happens to the profit of a typical
In a monopolistically competitive market, the government applies a specific tax of $1 per unit of output. What happens to the profit of a typical firm in this market? Does the number of firms in the market rise or fall? Why? What is the effect on prices and the number of firms under monopolistic competition if a government provides a subsidy that reduces the fixed cost of each firm in the industry
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