Answer to Question #140561 in Microeconomics for Blue

Question

garbage collector in the Roma Community is a monopolist. The community decides to impose a lump sum tax of K20,000 per year on the garbage collector. Can the garbage collector shift the burden of the lump sum tax to consumers in the community? Depict the solution graphically.

Answer 1

The garbage collector can shift the burden of the lump sum tax to consumers in the community, if the demand for his services is inelastic enough.