Question: 1 Suppose that the linear supply curve intersects the linear demand curve. The initial equilibrium is e. (1) Consider a specific (per unit) tax t,

1 Suppose that the linear supply curve intersects the linear demand curve. The initial equilibrium is e. (1) Consider a specific (per unit) tax t, show the tax effect on Government revenue. (2) Now suppose the demand curve becomes flatter, but still goes through point e, so that it is more elastic at e than originally. Discuss how the tax affects Government revenue differently than with the original demand curve (larger or smaller). Show the solutions with graph Question 2 Consider a competitive firm in an industry. The short-run cost function = 300 + 30 + ^2 , and the market price is 60 . (1) Determine the average variable cost () and the average cost () (2) What is the profit-maximizing output level for the firm? (3) What is the profit of the firm if it produces the profit-maximizing output? (4) Will the firm operate, or will it shut down in the short run

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Suppose that the linear supply curve intersects the linear demand curve. The initial equilibrium is e. (1) Consider a specific (per unit) tax t, show the tax effect on Government revenue. (2) Now...

ITS ECON . In the aftermath of the financial crisis of 2007 and 2008, many US policymakers have suggested that banks and other financial intermediaries should be subjected to tighter regulations. a....

1. Effects of Relaxing the Medallion Policy. Consider the example of taxi medallions shown in Figure Suppose the government relaxes the policy, increasing the number of medallions from 80 to 90. a....

Pliz Help. 5. Consider a simple economy in which only two goods are produced and sold: pizza and beer: The prices and quantities produced of these two goods over a th ree-year period are shown in the...

Micro quiz!!! 24. Unigene Labs has existing assets that generate an EPS of $5 per year, which is expected to remain constant if the firm does not invest except to maintain exiting assets. Unigene is...

Answer these.. 3} Diana has a car whose value is $40K. The probability of an accident is 10% and she will lose the car at occurrence of the accident. Diana has wealth of $20K aside from the car, and...

The taxation of a monopoly can sometimes produce results different from those that arise in the competitive case. Consider a per unit tax on the monopolist's good. For every unit sold the monopolist...

Price (E) 4 6 8 10 12 Quantity demanded 16 12 8 4 0 Quantity supplied 4 6 8 10 12 (a) Draw the demand and supply curves from the data in Table 1. (b) What is the equilibrium quantity demanded and...

AA Case Scenario -Berber Bread Yousef Tizir, Jr., CEO of Berber Breads Co. (BBC), Inc. offered his closing comments and then disconnected the conference call. The call had been with Costco...

carefully consider answering all the questions with good diagrams where applicable In this activity we study the topic of Franchising and explore it as an opportunity for business growth (franchisor)...

Show that the spectral radi of the iteration matrices corresponding to the methods Gauss-Seidel (Mgs) and successive over-relaxation (Msor) that are associated with the system algebraic indicated,...

Earlier this morning at rush hour in New York City, terrorists remotely exploded several IEDs located in different stops in the subway system. As a result, at least 100 have been killed or...

Let the number of phone calls received by a switchboard during a 5-minute interval be a random variable X with probability function f(x) = e22x x! , for x = 0, 1, 2,.... (a) Determine the probability...

6. Minimum demand requirements for a certain material at three Canadian military bases are for 100, 150, and 250 tons, respectively. The maximum number of tons that can be supplied by two companies...

1. Effort is important.

2. Set up two points representing the pillars of your values system. Discuss this with the others in the group.

8. Find values in the Norwegian culture that you believe have been stable over a long period. Do you feel that these values say something about your own values?