9.- A competitive firm reaches the minimum of the long-run average cost for y = 20 when it operates with the short-run cost function C = yi3-20yi2 + 100yi + 8000, where yi is the production of the firm. Then the long-run price equilibrium will be 500. If the government imposes a specific tax on output of 40 euros, what are the taxes collected by the government in the short-run and in the long-run, if the market demand is given by x = 2500 - 3p, where x is the quantity demanded by consumers and p is the price? Will the government collect more or less taxes in the long-run than in the short-run? Why? 9.- A competitive firm reaches the minimum of the long-run average cost for y₁= 20 when itoperates with the short-run cost function C = y₁³-20y² + 100y₁+8000, where y, is the productionof the firm. Then the long-run price equilibrium will be 500. If the government imposes a specifictax on output of 40 euros, what are the taxes collected by the government in the short-run andin the long-run, if the market demand is given by x = 2500-3p, where x is the quantitydemanded by consumers and p is the price? Will the government collect more or less taxes inthe long-run than in the short-run? Why?

The short run cost function is given as The equiibrium price in the long run is $500. The government…

Answered: 9.- A competitive firm reaches the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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9.- A competitive firm reaches the minimum of the long-run average cost for y = 20 when it operates with the short-run cost function C = yi3-20yi2 + 100yi + 8000, where yi is the production of the firm. Then the long-run price equilibrium will be 500. If the government imposes a specific tax on output of 40 euros, what are the taxes collected by the government in the short-run and in the long-run, if the market demand is given by x = 2500 - 3p, where x is the quantity demanded by consumers and p is the price? Will the government collect more or less taxes in the long-run than in the short-run? Why?

9.- A competitive firm reaches the minimum of the long-run average cost for y₁= 20 when it
operates with the short-run cost function C = y₁³-20y² + 100y₁+8000, where y, is the production
of the firm. Then the long-run price equilibrium will be 500. If the government imposes a specific
tax on output of 40 euros, what are the taxes collected by the government in the short-run and
in the long-run, if the market demand is given by x = 2500-3p, where x is the quantity
demanded by consumers and p is the price? Will the government collect more or less taxes in
the long-run than in the short-run? Why?

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