Barbara is a producer in a monopoly industry. Her demand curve and total cost curve are given by Q = 160 - 4P and TC = 4Q.Barbara will produce✓ units.Barbara will charge a price ofBarbara will make a profit ofSuppose now the government imposes a tax of 4 dollars on each unit sold. With the tax:Barbara will produce✓ units.Barbara will receive a price per unit ofhigher).Barbara will make a profit ofIn addition to the tax, suppose the government imposes a business levy (a fixed cost) of $500. With this levy:Barbara will produceBarbara will charge a price ofBarbara will make a profit of✓. Note: we're looking for the Barbara receives, not the price consumers pay (which will be✓ units.✓. Note: we're looking for the Barbara receives, not the price consumers pay (which will be higher).

Given, Q = 160 - 4P and TC = 4Q P = 40 - 0.25Q, inverse demand function TR = 40Q -0.25Q2When we…

Barbara is a producer in a monopoly industry. Her demand curve and total cost curve are given by Q = 160 - 4P and TC = 4Q. Barbara will produce ✓ units. Barbara will charge a price of Barbara will make a profit of

Barbara is a producer in a monopoly industry. Her demand curve and total cost curve are given by Q = 160 - 4P and TC = 4Q. Barbara will produce ✓ units. Barbara will charge a price of Barbara will make a profit of

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter13: Monopoly And Antitrust

Section: Chapter Questions

Problem 7P

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Question

Barbara is a producer in a monopoly industry. Her demand curve and total cost curve are given by Q = 160 - 4P and TC = 4Q.
Barbara will produce
✓ units.
Barbara will charge a price of
Barbara will make a profit of
Suppose now the government imposes a tax of 4 dollars on each unit sold. With the tax:
Barbara will produce
✓ units.
Barbara will receive a price per unit of
higher).
Barbara will make a profit of
In addition to the tax, suppose the government imposes a business levy (a fixed cost) of $500. With this levy:
Barbara will produce
Barbara will charge a price of
Barbara will make a profit of
✓. Note: we're looking for the Barbara receives, not the price consumers pay (which will be
✓ units.
✓. Note: we're looking for the Barbara receives, not the price consumers pay (which will be higher).

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