ABSTRACT
We suppose that the monopolist is confronted with a perfectly definite demand schedule for his commodity, and that he knows the shape of it in the neighbourhood of the point of equilibrium; also the shape of his cost curve in the neighbourhood of the point of equilibrium. We can conveniently refer to the factors which the monopolist himself supplies as his private factors. If the tax imposed is a proportional one and is constructed so as to fall on the reward to the private factors of the monopolist, then very simple reasoning shows that the price of the commodity will remain unchanged. The monopolist had fixed price before the tax so as to get the maximum possible reward. The supply of the monopolist's private factors to the line of production, however, may not be fixed.
