If the government imposes a specific tax on a monopoly,the consumer's tax incidence
A) can exceed 100%.
B) will always be between 0-100%.
C) may be negative.
D) will be the same as when the tax is imposed on a perfectly competitive firm.

Question

Quizplus · Accepted Answer

In the case of a monopoly, the tax burden may be passed entirely onto the consumers in the form of higher prices. This could result in the consumer tax incidence exceeding 100%.

If the Government Imposes a Specific Tax on a Monopoly,the