Q1. Assume that in the preceding problem, the government levies an excise tax of $5 per dose on the monopolists. Illustrate what would happen to the monopolists' profit-maximizing output and price? Illustrate what would happen to consumer and producer surplus? Explain how more money would the government collect due to the tax? Illustrate what would be the size of the resulting deadweight loss relative to the competitive outcome?

Q2. Assume you elasticity of demand for your parking lot spaces are -o.5, and price is $20 per day. If your MC is zero, and your capacity at 9 A.M. is 96% full over the last month, are you optimizing?