Author Question: In the long-run equilibrium in monopolistic competition, price equals marginal cost. Indicate ... (Read 124 times)

eruditmonkey@yahoo.com · **on:** Jun 29, 2018

In the long-run equilibrium in monopolistic competition, price equals marginal cost.

Indicate whether the statement is true or false

Question 2

The table above shows the distribution of income in Swacko. The government of Swacko imposes a 20 percent tax on the people with the highest 40 percent of income.

The government then distributes 50 percent of the tax collected to the lowest 20 percent and 25 percent to the second 20 percent and the middle 20 percent. Suppose that the before-tax group incomes remain as above. Before and after the distribution, what percentage of national income belongs to the lowest 20 percent? A) 2 percent; 10 percent
B) 20 percent; 20 percent
C) 5 percent; 25 percent
D) 2 percent; 2 percent