Long run eq, Microeconomics

Assignment Help:
The raspberry growing industry is a perfectly competitive industry. The firms in the industry have a U-shaped LAC, minimum average cost is $8 and the minimum efficient scale is 4 units of X. The market demand curve is given by Q = 48-P.
a. Determine the long-run equilibrium price, quantity per firm, market quantity and number of firms. What profit does each firm earn in long-run?
b. Suppose that the government imposes a per-unit tax of $2 on the firms in the industry. Analyze the long-run effects of the policy. Draw a two part diagram (one for the typical firm and one for the market) to show the long-run effect of the policy on the industry.
c. Instead of a per-unit tax above, suppose that the government is considering of imposing a lump-sum tax. What would the effect of the lump-sum tax be on the long-run equilibrium price? Will firms enter or exit the industry?

Related Discussions:- Long run eq

Microeconomies, Why some country saving less and consumption more?

Why some country saving less and consumption more?

Chamberline approach, a more simple explanation of the group equilibrium in...

a more simple explanation of the group equilibrium in the short and long run

Production function, Given the cost function as C=0.3Q3 -2Q2 + 13Q + 25, fi...

Given the cost function as C=0.3Q3 -2Q2 + 13Q + 25, find the supply function.uestion..

PRINCIPLE OF TRANSPORT ECONOMICS, IN YOUR OWN WORDS,HOW DO YOU DIFINE TRANS...

IN YOUR OWN WORDS,HOW DO YOU DIFINE TRANSPORT ECONOMICS?GIVE RELAVANT EXAMPLES OF THIS AREA OF ECONOMICS.

Egyptian Labor Market.., How to use Demand and Supply tools to analyze the ...

How to use Demand and Supply tools to analyze the case of the Egyptian labor market?

Moving average methods, Moving Average Methods: Under this methods the movi...

Moving Average Methods: Under this methods the moving average to the sales of the past years is computed. The computed moving average is taken as forecast for the next year or peri

Explain about theoretical investigation, Assume you see that two macroecono...

Assume you see that two macroeconomic variables are correlated with each other.  But you want to know if there's an underlying or causal relationship between the two variables.  Wo

How the classical school views the role of markets, Explain the how the cla...

Explain the how the classical school views the role of markets and government intervention in fighting business cycles The classical school believes in the smooth functioning o

Economics 304 , 1. Implicit and explicit revenues minus implicit and explic...

1. Implicit and explicit revenues minus implicit and explicit costs equals: A. accounting profit. B. economic profit. C. zero profit. D. implicit profit. 2. A business owner mak

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd