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Author Question: A monopolist always selects a price on the elastic portion of its demand curve. a. True b. False ... (Read 29 times)

Pineappleeh

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on: Jun 30, 2018
A monopolist always selects a price on the elastic portion of its demand curve.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 2

Use the idea of interpersonal comparisons of utility to argue for a progressive income tax system where people in higher income brackets are charged higher tax rates on their extra income.


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Carissamariew

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Reply #1 on: Jun 30, 2018
Answer to Question 1

True

Answer to Question 2

Since the marginal utility of money diminishes for each individual, it seems reasonable to suppose that the utility a rich person derives from his/her marginal dollar is less than the utility a poor person derives from his/her marginal dollar. If the rich person doesn't get as much utility from his/her marginal dollar, then it won't hurt them as much to tax it away as it would hurt a poor person.


Pineappleeh

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Reply #2 on: Jun 30, 2018
Thank you :)


Carissamariew

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Reply #3 on: Jun 30, 2018
Happy to help you


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