Suppose that a monopolist has a cost function given by C(q)= 10 + 2q + 0.5q².The (inverse)demand for the product is given by P(q)= 47 - q.The government levies a tax of $9 per unit,to be paid to the government by the monopolist.
(a)What is the market quantity and price?
(b)The government levies a tax of $9 per unit,to be paid to the government by the monopolist.What is the new market price and quantity?
(c)How much of the tax do the consumers bear? How much does the monopolist bear?

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The Answer of Suppose that a monopolist has a cost function given by C(q)= 10 + 2q + 0.5q².The (inverse)demand for the product is given by P(q)= 47 - q.The government levies a tax of $9 per unit,to be paid to the government by the monopolist. (a)What is the market quantity and price? (b)The government levies a tax of $9 per unit,to be paid to the government by the monopolist.What is the new market price and quantity? (c)How much of the tax do the consumers bear? How much does the monopolist bear?

Suppose That a Monopolist Has a Cost Function Given by C(q)=