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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