I am stuck on this problem, would be amazing if can get some help.
Question :
Assume that a monopoly firm has a linear demand curve and a constant marginal cost curve. How would you be graphing this firm's optimal output choice before + after a per unit excise tax is placed on the output.
Would also the new equilibrium price rise by as much as the tax?
Question :
Assume that a monopoly firm has a linear demand curve and a constant marginal cost curve. How would you be graphing this firm's optimal output choice before + after a per unit excise tax is placed on the output.
Would also the new equilibrium price rise by as much as the tax?