A tax on a previously untaxed monopoly-produced good will necessarily lower total welfare if
A) the demand curve is relatively inelastic.
B) the demand curve is relatively elastic.
C) less than the socially optimum is produced before the tax.
D) more than the socially optimum is produced before the tax.
Question 2
Monopolizing the sale of liquor
A) can lead to an increase in total welfare.
B) will decrease total welfare.
C) results in a deadweight loss.
D) is anti-competitive and thus lowers total welfare.
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