Reference no: EM131057021
A competitive industry is in long-run equilibrium. Market demand is linear, p = a - bQ, where a> 0, b > 0, and Q is market output. Each firm in the industry has the same technology with cost function, c(q) =k2 + q2.
(a) What is the long-run equilibrium price? (Assume what is necessary of the parameters to ensure that this is positive and less than a.)
(b) Suppose that the government imposes a per-unit tax, t > 0, on every producing firm in the industry.
Describe what would happen in the long run to the number of firms in the industry. What is the post-tax market equilibrium price? (Again, assume whatever is necessary to ensure that this is positive and less than a.)
(c) Calculate the long-run effect of this tax on consumer surplus. Show that the loss in consumer surplus from this tax exceeds the amount of tax revenue collected by the government in the post-tax market equilibrium.
(d) Would a lump-sum tax, levied on producers and designed to raise the same amount of tax revenue, be preferred by consumers? Justify your answer.
(e) State the conditions under which a lump-sum tax, levied on consumers and designed to raise the same amount of revenue, would be preferred by consumers to either preceding form of tax
Identifies areas of international business law
: Identifies areas of international business law and practices and the information needs of your company - how ethics and culture affect transactions with your international business partners and the strategies you should consider when entering those..
|
About the liquidity premium
: Liquidity Premium
|
Calculate the amortized fees and expenses for this loan
: Suppose you take a 26-year mortgage of $210000. The annual interest rate is 4%, and the annual APR is 5%. Loan payments are made annually. Calculate the amortized fees and expenses for this loan (in dollars, provide your answer with $1 precision).
|
Balanced equation for reaction
: A voltaic cell is prepared in which copper metal is oxidized to Cu(II), and silver ion is reduced to silver metal. Which of the following represents the correctly balanced equation for this reaction?
|
The long-run equilibrium price
: A competitive industry is in long-run equilibrium. Market demand is linear, p = a - bQ, where a> 0, b > 0, and Q is market output. Each firm in the industry has the same technology with cost function, c(q) =k2 + q2.
|
Explain the problems associated with inflation
: Explain what is meant by inflation and deflation, clearly distinguish between the two terms. Explain the problems associated with inflation.
|
Initial concentration of the reactant
: A reaction that is second-order in one reactant has a rate constant of 2.2 × 10-2 L/(mol · s). If the initial concentration of the reactant is 0.360 mol/L, how long will it take for the concentration to become 0.180 mol/L?
|
Design a fuel intake system for a large dual-fuel ci engine
: Choose an appropriate main fuel and givethe flow rates of both fuels. What is the overall air-fuel ratio? State all assumptions you make.
|
Discuss the risks associated with arbitrage transactions
: QI. "A swap bank has to entail certain risks which are inherent to the swap business and are interrelated" Explain the risks involves in swap business.
|