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Unformatted text preview: Q where Q is output. (a) What quantity should he sell to maximize his prots? (b) What price should he charge to maximize his prots? (c) What quantity should he produce if his goal is to maximize his total revenue? (d) What price should he charge in order to maximize his total revenue? 3. Suppose that the monopolist of the previous problem has to pay a sales tax of $20 per unit sold. (a) What happens to his marginal cost? (b) What quantity should he sell to maximize his prots? (c) What price should he charge to maximize his prots? How much does the price paid by consumers increase as a result of the $20 perunit tax? Answers on Next Page ANSWER KEY Question Number Answer 1 D 2A) Q = 190 2B) P = $105 2 C) Q = 200 2D) P = $100 3A) It increases from $10 to $30. 3B) Q = 170 3C) P = $115 3D) $10...
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This note was uploaded on 10/12/2008 for the course ECON 1 taught by Professor Bergstrom during the Spring '07 term at UCSB.
 Spring '07
 Bergstrom
 Economics, Monopoly

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