A firm has to pay a tax equal to 25% of its revenue. Give a condition that determines the output level at which it maximizes its after-tax profit.
Answer to relevant QuestionsIn Q& A 7.2, suppose that Ann’s compensation, Y, is half of the firm’s profit minus $ 30,000: Y = π / 2 – 30,000. Will she still seek to maximize the firm’s profit? Inside directors of a firm are also executives of the firm, and they normally receive compensation that includes some form of profit sharing. Outside directors are not employees of the firm. They normally receive some ...When the western part of the United States was sparsely populated, many small towns had a single schoolhouse in which one teacher taught all subjects to students of all ages. Nowadays, in large cities, teachers are often ...Initially, the market price was p = 20 and the competitive firm’s minimum average variable cost was 18, while its minimum average cost was 21. Should it shut down? Why? Now this firm’s average variable cost increases by ...As of 2013, customers at California grocery and drug stores must pay an extra 10¢ for every paper bag that the store provides (the store keeps this fee). Does such a charge affect the marginal cost of any particular good? ...
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