question archive Consider a monopoly market that is subject to a per-unit tax, t > 0
Consider a monopoly market that is subject to a per-unit tax, t > 0
Subject:SociologyPrice: Bought3
Consider a monopoly market that is subject to a per-unit tax, t > 0. The firm has constant average costs and faces the following demand curve q(p) = p-a, where a>1, and p is price per unit and q is the quantity demanded 13 (a) find the own-price elasticity of demand (b) Intuitively discuss the sensitivity of your answer in part (b) to the value of the own- price elasticity of demand.
