Assertion (A) : The imposition of Sales Tax does not affect the profit of the monopolist. Reason (R) :…

A sales tax can reduce a monopolist’s profit because it changes the marginal trade-off and feasible net receipts. Some burden is normally shifted to consumers through a higher gross price, but that does not imply full pass-through or unchanged profit. Thus the assertion is false and the reason true in its conventional partial-shifting sense. The two both-true codes and the assertion-true code fail. Both (A) and (R) are true and (R) is the correct explanation of (A). : Does not satisfy the relationships or definition explained above. Both (A) and (R) are true, but (R) is not the correct explanation of (A). : Does not satisfy the relationships or definition explained above. (A) is true, but (R) is false. : Does not satisfy the relationships or definition explained above. (A) is false, but (R) is true. : Correct in the comparison explained above.