Question: Each firm in a competitive market has a cost function of C(q) = q q^2 + q^3 . The market has an unlimited number of

Each firm in a competitive market has a cost function of C(q) = q q^2 + q^3 . The market has an unlimited number of potential firms. The market demand function is Q = 24 P. a. Determine the long-run equilibrium price, the quantity per firm, the market quantity, and the number of the firms.

b. How do these values change if a tax of $1 per unit is collected from each firm?

c. How would these values change if instead of a tax the government implements a price floor of 30?

d. What would that imply for the decisions of producing and entering/exiting the market?

i only want the answer for C and D

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 Accounting Questions!