If a regulatory agency imposes a lump- sum tax on a monopolist (i.e.,a tax that is independent of the level of output) it will reduce the firm's profits because the tax increases
A) both the LRAC and the MC,leaving price and output unchanged.
B) all costs as it shifts the demand curve to the right.
C) all costs as it shifts the demand curve to the left.
D) price whereas quantity demanded falls.
E) the LRAC but not the MC,leaving price and output unchanged.
Correct Answer:
Verified
Q59: The diagram below shows the market demand
Q60: FIGURE 12- 3 Q61: FIGURE 12- 1 Consider three firms,A,B and Q62: FIGURE 12- 3 Q63: FIGURE 12- 1 Consider three firms,A,B and Q65: The diagram below shows the market demand Q67: The diagram below shows the market demand Q68: The diagram below shows the market demand Q69: Allocative efficiency concerns Q79: The diagram below shows the demand and![]()
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A)producing outputs at lowest possible
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