You are the manager of a monopolist. Assume that the demand curve of the firm is linear, and the marginal cost is a fixed constant. a. Graphically illustrate the profit-maximizing output and price set by the monopolistic firm. b. If the government set a tax of $t per unit sold, graphically illustrate how the output and price of the monopolist’s profit maximization will change?

Economics: Private and Public Choice (MindTap Course List)
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Chapter24: Price-searcher Markets With High Entry Barriers
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You are the manager of a monopolist. Assume that the demand curve of the firm is linear, and the marginal cost is a fixed constant.

a. Graphically illustrate the profit-maximizing output and price set by the monopolistic firm.

b. If the government set a tax of $t per unit sold, graphically illustrate how the output and price of the monopolist’s profit maximization will change?

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