In a perfectly competitive and constant cost industry, all firms are identical. If the market demand function is: QD 20q? + 120q. a. In the long run, what is the firm's equilibrium production decision? b. In the long run, what is the market equilibrium price and quantity? What is the industry's long-run supply curve? In the long run, how many firms will stay in the industry? d. If the government decide to impost a $7 tax per unit, what is the new long-run equilibrium market price and quantity? e. How many firms are producing after the tax? 600 – P, a typical firm's cost function is: TC = q3 - c.

In a perfectly competitive and constant cost industry, all firms are identical. If the market demand function is: QD 20q? + 120q. a. In the long run, what is the firm's equilibrium production decision? b. In the long run, what is the market equilibrium price and quantity? What is the industry's long-run supply curve? In the long run, how many firms will stay in the industry? d. If the government decide to impost a $7 tax per unit, what is the new long-run equilibrium market price and quantity? e. How many firms are producing after the tax? 600 – P, a typical firm's cost function is: TC = q3 - c.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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