Author Question: If a monopoly can perfectly price discriminate, A) all the demanders pay one price. B) it ... (Read 18 times)

fox · **on:** Jun 29, 2018

If a monopoly can perfectly price discriminate,

A) all the demanders pay one price.
B) it minimizes its profit.
C) it produces the same amount of output as would be produced if the market was a perfectly competitive industry.
D) it produces less output than would be produced if the market was a perfectly competitive industry.
E) it creates the same amount of consumer surplus as would be created if the market was a perfectly competitive industry.

Question 2

Why are lump-sum taxes regressive in nature?

What will be an ideal response?

itsakadoozi · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

C

Answer to Question 2

Lump-sum taxes require each individual to pay the same amount in taxes. Therefore, low-income households need to pay a higher percentage of their income as taxes than do high-income households. Therefore, lump-sum taxes are regressive in nature.