suppose that a monopolistic seller of designer handbags faces the following inverse demand curve: P = 50 – 0.4Q. The seller can produce handbags for a constant marginal and average total cost of $10.
A) Calculate the profit – maximizing price for this seller.
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Get Help Now!B) Suppose the government levies a $4 tax per unit on sellers of handbags.
Calculate how this tax will affect the price the monopolist charges its customers
C) Who bears the burden of this tax?
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