isi 2010 me2

[SHIKHA]

 A monopolist has cost function c(y) = y so that its marginal cost is
constant at Re. 1 per unit. It faces the following demand curve
D (p) = 0; if p > 20
        = 100/p ; if p<=20.
Find the profit maximizing level of output if the government imposes a
per unit tax of Re. 1 per unit, and also the dead-weight loss from the
tax.

plz helpp!!!
my ans is p=20 he will maximize..how to calculate dwl???

[lovekesh]

i don't think there should be any dead weight loss. If the Monopolist is still maximizing profits, then he still has no incentive to produce more than 5 and there's no demand above price 20. So, all he has this one point. If govt impose tax, all there is redistribution of surplus from producer to government. So, still he is producing 5 units. Thus No deadweight loss coz he cannot increase the price to compensate for tax and he can't produce more as he is maximizing his profits. I could be wrong though. What you think.

[SHIKHA]

even i think DWL is zero...