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

Concepts of income and substitution effects, Concepts of Income and Substit...

Concepts of Income and Substitution Effects:   Change in demand for a good due to one unit change in price of that good for given prices and money income is known as own price

Game, Suppose that there are n bidders whose valuations vis are drawn indep...

Suppose that there are n bidders whose valuations vis are drawn independently and identically from the distribution F over [0, ?]. Describe and derive the symmetric , monotonic equ

Managerial Economics, What does economic theory contribute to managerial ec...

What does economic theory contribute to managerial economics? Explain

Determine the price elasticity of demand, Given the following demand and to...

Given the following demand and total cost functions for a firm P = 4500 - 0.5Q 2                     TC = 1.5Q 3 - 50Q 2 + 1000   i) the marginal profit function

Determinants of private demand - waiting-time for employment, Determinants ...

Determinants of Private Demand - Waiting-Time for Employment ‘Waiting time’ for employment is another important factor. The waiting time varies from course to course. For inst

Monopoly, causes for emergency of monopoly

causes for emergency of monopoly

Utitility, In November 2010, every Mzumbe University student had an income ...

In November 2010, every Mzumbe University student had an income of 150000/= per month,facing the price of meal (X) 1000/= and average price of other goods (Y) 1000/=.The initial ut

Educational financing, Normal 0 false false false EN-IN...

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

Economics, Assume that a persion lives for three equal periods: Youth, Earl...

Assume that a persion lives for three equal periods: Youth, Early Adulthood and Late Adulthood. The person dies after later adulthood period ends. If one invests $200 in educatio

What are the properties of consumer demand, What are the properties of cons...

What are the properties of consumer demand? Properties of Consumer Demand: In this section check the comparative statics of consumer demand behaviour as: how the demand of cons

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