LeAnn's telecommunications firm has a monopoly in the local market. The elasticity of demand is -4 at every price (Note: Demand is not linear.). LeAnn's marginal costs are constant at $0.90. If LeAnn is maximizing profits, calculate the price she is charging. If the local community institutes a $0.10 tax on each unit LeAnn sells, calculate the new price LeAnn will charge consumers. What portion of the tax does LeAnn absorb?

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The Answer of LeAnn's telecommunications firm has a monopoly in the local market. The elasticity of demand is -4 at every price (Note: Demand is not linear.). LeAnn's marginal costs are constant at $0.90. If LeAnn is maximizing profits, calculate the price she is charging. If the local community institutes a $0.10 tax on each unit LeAnn sells, calculate the new price LeAnn will charge consumers. What portion of the tax does LeAnn absorb?

LeAnn's Telecommunications Firm Has a Monopoly in the Local Market