thelazyman
Junior Member
- Joined
- Jan 14, 2006
- Messages
- 58
Hi, need some help with this problem I have no idea how too start it
A per-unit tax t > 0 is levied on the output of a monopoly. The monopolist faces demand q = p^-E, E>1, and has constant average costs. Show that the monopolist will increase price by more than the amount of the per-unit tax.
Any help will be greatly appreciated.
Thanks
A per-unit tax t > 0 is levied on the output of a monopoly. The monopolist faces demand q = p^-E, E>1, and has constant average costs. Show that the monopolist will increase price by more than the amount of the per-unit tax.
Any help will be greatly appreciated.
Thanks