Short and long-run marginal and average cost curves

Assignment Help Business Economics

Reference no: EM131379911

How will a tax of $5 per unit produced affect the short- and long-run marginal and average cost curves? What about an annual license fee of $500 per year regardless of production level? (Make sure you address all possible average costs—e.g., fixed, variable, total—depending on whether you are in the short or long run.)

Reference no: EM131379911

Questions Cloud

Economists recommend that crime policy : Economists recommend that crime policy have the goal of minimizing the "costs of crime", which include the social costs of the crimes themselves and the social cost of enforcing the criminal law. What is the general rule for determining whether a par..

Company is considering new bottle-capping machine : A company is considering a new bottle-capping machine. The initial cost of the machine is 300,000 SR and it has a 20 year life. Yearly maintenance cost is estimated to be 15000 per year. The machine required a major overhaul costing 50000 at the end ..

Assuming the industry is in long-run equilibrium : Suppose there are ten firms in a monopolistically competitive industry, each with an equal share of the market. The market demand is given as Q = 10200 – P. Each firm has a total cost function TC = 51000 + 500q2. Assuming the industry is in long-ru..

What will be the future value of your investment : Consider a situation in which you invest 7000 SR per year for 7 year in a bank account that has an annual interest rate of 10%. What will be the future value of your investment?

Short and long-run marginal and average cost curves : How will a tax of $5 per unit produced affect the short- and long-run marginal and average cost curves? What about an annual license fee of $500 per year regardless of production level?

Producer who is attempting to maximize wealth : “A producer who is attempting to maximize wealth (or profit) will never knowingly set their output where the demand for their product is ‘inelastic.’” Refute or prove this statement. Does your answer depend on whether the producer is a price taker or..

Two firms have identical cost curves : Two firms have identical cost curves, but firm A is a price taker while firm B is a price searcher. Is it possible that the two firms could find themselves at the same wealth maximizing output? (Assume that firm B is NOT able to engage in any form of..

Make general statement about value of elasticity of demand : A price searcher faces a demand that is given by P = 100/Q. What does the Marginal Revenue curve look like (graph it). What is the value of elasticity of demand at quantities Q = 10; Q = 50; Q = 100? Can you make a general statement about the value o..

Methodologies of risk assessment : What do you think of the property of transitivity in choice theory and methodologies of risk assessment. How can we improve the ways we assess risk, or think about choices we make?

User Account

All Pages