Consider a monopolist that is earning profits in the long run.If the government imposes a lump- sum tax on this monopolist (that is less than its profits),then

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Since the lump-sum tax is less than the profits of the monopolist, it will continue to produce and try to maximize its profits. However, since the tax is a fixed amount, it will not affect the marginal cost of production or the demand for the monopolist's product. As a result, the monopolist will continue to produce the same quantity of output and charge the same price to consumers.

Consider a Monopolist That Is Earning Profits in the Long