Consider a monopolist setting a single price to all consumers that faces a demand curve of P = 20 -2 q, where P is price and q is the quantity sold. The monopolist has a marginal cost curve of MC = q. The government implements a per-unit tax of $5 per unit, to be paid for by the monopolist. What is the increase in price faced by consumers as a result of the introduction of the tax? 01 02 O 3 05 Previous Next > Question 2 A monopolist engaging in third-degree price discrimination I. has lower profit than a monopolist engaging in first-degree price discrimination II. sets the price equal to the consumer's willingness to pay III. cannot identify which group of consumers any particular individual belongs to O only I is correct O both I and III are correct O only II is correct O both II and III are correct Question 3 There are two inputs L and K with the price of each input w and r, respectively. When the isocost line is tangent to a strictly convex isoquant, then I. MR = MC II. The firm is producing at the minimum cost for the given level of output III. The two inputs K and L are perfect substitutes IV. MRS=-w/r Olis correct O II is correct O II and III are correct OIV is correct
