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If a monopolist produces good 1 while the markets for good 2 and both inputs are perfectly competitive, then the general equilibrium is inefficient...
If a monopolist produces good 1 while the markets for good 2 and both inputs areperfectly competitive, then the general equilibrium is inefficient because MRS and MRTare different. Show that a tax on the production of good 2 can eliminate the inefficiencyof the monopoly.