Derive the two firms total cost functions

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Reference no: EM133074440

Step 1: Derive the two firms' total cost functions for the case in which there is no tax imposed on the taxi industry.

Step 2: Derive the two firms' profit functions for the case in which there is no tax imposed on the taxi industry.

Step 3: Derive the two firms' best response functions for the case in which there is no tax imposed on the taxi industry.

Step 4: Derive the long-run equilibrium firm quantities, market price, firm profits, and consumer surplus. for the case in which there is no tax imposed on the taxi industry.

Step 5: Repeat steps 1 to 4 for the case in which a $2.40 tax per trip is imposed on the taxi industry.

Step 6: Derive the long-run equilibrium firm quantities, market price, firm profits. and consumer surplus. for the case in which a $50,000 per day tax is imposed on the taxi industry.

Reference no: EM133074440

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