# Economics

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Q1) whether the following statement is true or not? some reasons plz~!

"a monopolist produced 1 million units last year. If a \$10 per unit tax is imposed, the profits of the monopolist will decrease by \$10 million"

• Economics -

Chances are the monopolist would raise the price of the product by \$10 a unit and the profits would remain the same.

• Economics -

False: profits will decrease, but by an amount less than \$10M. The monopolist will cut back on production; it will produce something less than 1 million units.

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