If a monopolist has a specific tax of $1 per unit levied on its output, the monopolist will charge a price

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    that is $1 higher than the price charged before the tax was imposed, since the monopolist is the sole producer in the market and so can pass the entire tax along to the consumer.
     that corresponds to the point along its demand curve at the quantity where marginal revenue equals marginal cost plus $1 (i.e., where MR=MC + $1).
     that corresponds to the point along its demand curve at the quantity where marginal revenue plus $1 equals marginal cost (i.e., where MR +$1 =MC).
     that ranges between $0.00 and $1.00 higher than the price charged before the tax was imposed, depending upon the price elasticity of demand.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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that corresponds to the point along its demand curve at the quantity where marginal revenue equals marginal cost plus $1 (i.e., where MR=MC + $1).
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)

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