Question

Question 27 (1 point) Imposing a per unit tax on a perfectly_price discriminating monopolist will have an uncertain impact on output. shift out the consumer demand curve. reduce its output increase its output. Question 28 (1 point) In a Cournot duopoly model with inverse market demand P = a - bQ, where a and b are positive constants, and zero marginal costs for both firms, the output and price for each duopolist are, a/b and 0. 2a/3b and a/3. a/3b and 2a/3. a/3b and a/3.

Answer 1

Q27) option 3)

if t is imposed, MC rises by t,

So Q falls

28) option 4)

Output for each firm : q1= (a-c)/3b

So q1= q2= a/3b

Q= 2a/3b

P = a-Qb= a- 2a/3

= a/3

29) option 2)

Profit Maximizing rule, MC = P(1 - 1/e)

When e = 2, 12= P(1- 1/2)

12= P/2

P*= 24

If e= 4,

12= P(1-1/4)

12= 3P/4

P'= 16

30) option 4)

Resale in case of services aren't possible