None Use the following scenario to answer the next two questions.In 2021, three firms (Firm A, Firm B, and Firm C) were offering tax preparation services in a small town for a price of $300 per annual return. Each firm servicedcustomers; thus, all firms together serviced a total of 300 customers. Assume marginal cost is $100 for all firms. In 2022, Firms A and B each continued to servi100 customers, but Firm C now serviced 150 customers; thus, all firms together serviced a total of 350 customers. All firms now charge $275 per return.Firm C's monthly profit increased by$6,250.due only to the output effect and decreased bydue only to the price effect, for a net increase ofOa. $12,000; $5,050O b. $13,000; $6,750Oc. $9,500; $3,250Od. $10,000; $3,750Oe. $11,500; $5,250

The changes for Firm C:Output Effect: The output effect relates to the increase in profit due to the…

Answered: Use the following scenario to answer…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Despondent over the Red Sox's terrible season, Prof. Gruber decides to quit his day job and start a bicycle manufacturing firm in Kendall Square. As he starts looking into the bicycle manufacturing industry, he realizes it has some interesting features. First, he realizes that it operates as a competitive industry. Second, he finds that there are two technologies used by firms in the industry. Technology 1 uses solar power, and has a cost function C1(q)=q+4Q2+32 for q>0. Technology 2 uses electricity from the grid and is more efficient, with a cost function C2(q)=q+2Q2+32 for q>0. Assume that we are in the long run, so firms using both technologies can shut and leave the market at 0 cost, so that C(0)=0 for both technologies. Now, suppose that the government of Massachusetts offers solar subsidies to 10 bicycle manufacturers. These subsidies are for $80 and the manufacturers receive these subsidies as long as they construct a bicycle manufacturing plant using the newly-invented…
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Note : do not copy from other source please. Answer should be unique
am. 157.
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