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A Tax on a Previously Untaxed Monopoly-Produced Good Will Necessarily

Question 102

Multiple Choice

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.

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