Suppose that a monopolist faced the following demand curve for its goods. Its marginal cost per unit

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Suppose that a monopolist faced the following demand curve for its goods. Its marginal cost per unit of production is 50, and it faces no fi xed costs

(a) Calculate the profi t-maximizing output and price.

(b) Suppose the workers negotiate a health insurance benefi t increase that increases marginal cost per unit from 50 to 60.

Calculate the new profi t-maximizing output and price.

(c) Who bears the costs of the benefi t increase? Why?

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The Economics Of Health And Health Care

ISBN: 9781138208049

8th Edition

Authors: Sherman Folland, Allen C. Goodman, Miron Stano

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