A monopolist faces the inverse demand curve P = 60 - Q. It has variable costs of Q2 so that its marginal costs are 2Q, and it has fixed costs of 30. If a governmental agency imposes an 8 per unit specific tax on output, the deadweight loss from both the monopoly and the tax is
A) 37.50.
B) 73.00
C) 526.50.
D) 562.50.
Question 2
The competitive firm's supply curve is equal to
A) its marginal cost curve.
B) the portion of its marginal cost curve that lies above AC.
C) the portion of its marginal cost curve that lies above AVC.
D) the portion of its marginal cost curve that lies above AFC.
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