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Homework answers / question archive / If the government wanted to encourage a monopoly to produce the socially efficient quantity, should it use a per-unit tax, or a per-unit subsidy? Explain how this tax or subsidy would achieve the socially efficient level of output

If the government wanted to encourage a monopoly to produce the socially efficient quantity, should it use a per-unit tax, or a per-unit subsidy? Explain how this tax or subsidy would achieve the socially efficient level of output

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If the government wanted to encourage a monopoly to produce the socially efficient quantity, should it use a per-unit tax, or a per-unit subsidy? Explain how this tax or subsidy would achieve the socially efficient level of output. Among the various interested parties, the monopoly firm, the monopoly's consumers, and other taxpayers, who would support the policy, and who would oppose it?

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