Penny’s Pineapples, the only firm in Kingsland that produces pineapples, has a large fixed cost and a low marginal cost.

Penny’s Pineapples, the only firm in Kingsland that produces pineapples, has a large fixed cost and a low marginal cost. Being a monopolist, Penny maximises profit and produces at a less-than-competitive level of output. Since this creates a deadweight loss, the government decided to impose a tax on the profit Penny makes. This tax on profit will:Answerdecrease deadweight loss.reduce the profit but cause no change in quantity produced.could u explain for me please.

Penny’s Pineapples, the only firm in Kingsland that produces pineapples, has a large fixed cost and a low marginal cost. Being amonopolist, Penny maximises profit and produces at a…

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