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

Homework, Which of the following has not occurred over time in the past sev...

Which of the following has not occurred over time in the past several decades in the physician services market? A. The level of competition has increased. B. Economies of scale ha

Educational planning and economic growth, Normal 0 false fals...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Consumer equilibrim, explain consumer equilibrium diagrammatically as well ...

explain consumer equilibrium diagrammatically as well mathematically by using necessary and sufficient conditions

Consumer choice, Consumer Choice   * Consumers choose a combination of g...

Consumer Choice   * Consumers choose a combination of goods which will maximize satisfaction they can attain, given the some degree of budget available to them. * The maximiz

Mrs and mrts, compare marginal rate of technical substitution and marginal ...

compare marginal rate of technical substitution and marginal rate of substitution

Mixed economy, is south african economic system more allocative efficient?

is south african economic system more allocative efficient?

How are consequences of economists used, How are consequences of economists...

How are consequences of economists used? Economists generally use efficiency, information, equilibrium and incentive compatibility like focal points, and examine the consequenc

Explain elasticity coefficient, The elasticity coefficient is a number meas...

The elasticity coefficient is a number measured using price and quantity data to verify how responsive consumers are to changes in the price of a commodity.  The elasticity coeffic

Marginal product, I am having a hard time figuring out how to find marginal...

I am having a hard time figuring out how to find marginal product.

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