6. All firms in a competitive industry have cost C = q² + 100. Market demand is D = 240 - 3p. a. Provide a pair of fully labelled diagrams showing "The Firm" and "The Industry" to illustrate and quantify the adjustments in prices, quantities, profits and the number of firms that would be caused by the introduction of a $20 per-unit tax. Show all calculations. b. Revenue earned by the government will be dollars per firm. C. TRUE or FALSE: "The amount earned by government (per firm) would be larger if this was an Decreasing Cost Industry."

6. All firms in a competitive industry have cost C = q² + 100. Market demand is D = 240 - 3p. a. Provide a pair of fully labelled diagrams showing "The Firm" and "The Industry" to illustrate and quantify the adjustments in prices, quantities, profits and the number of firms that would be caused by the introduction of a $20 per-unit tax. Show all calculations. b. Revenue earned by the government will be dollars per firm. C. TRUE or FALSE: "The amount earned by government (per firm) would be larger if this was an Decreasing Cost Industry."

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Table 14-9 Suppose that a firm in a competitive market faces the following revenues and costs: Quantity Total Revenue $0 Total Cost $10 $9 $14 2 $18 $19 3 $27 $25 4 $36 $32 5 $45 $40 6 $54 $49 7 $63 $59 8 $72 $70 $81 $82 Refer to Table 14-9. In order to maximize profit, the firm will produce a level of output where marginal revenue is equal to $6. $8. $7. $9.
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Question #1: Assume agricultural products are identical and there are many sellers and buyers of agriculture products:a. State the profit maximizing condition for each seller of agricultural products.b. Graphically, show the market equilibrium of the industry and a seller where economic profits equal zero. Please include marginalrevenues, demand curve, price and quantity at the equilibrium.c. From part b above, if the number of buyers increases, show the new short run equilibrium for a seller and the industry as awhole.
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