Economics homework question?

Posted on 2014-12-04 08:20:00 in Economics by DELO

Allocative inefficiency happens in a monopoly because at the profit-maximizing output level:

a) Elastic, thus the government's cigarette-tax revenues would rise with a tax increase

b) Elastic, thus the government's cigarette-tax revenues would fall with a tax increase

c) Inelastic, thus the government's cigarette-tax revenues would fall with a tax increase

d) Inelastic, thus the government's cigarette-tax revenues would rise with a tax increase

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