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

Benefits of education, Normal 0 false false false EN-IN...

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

Corporatism, Corporatism: A system for managing income distribution andwage...

Corporatism: A system for managing income distribution andwage determination, in that wage levels are determined centrally (across industries or even whole countries) on the founda

Ppc linegraph of trade in production between pawpaws and campsites., could ...

could the village prepare 14 campsites and grow 350 pawpaws?explain your answer.

Law of demand, identify any four other law of demand and give examples

identify any four other law of demand and give examples

Second Best, What is the theory of second best

What is the theory of second best

Economic efficiency, Economic Ef ficiency The effort to ma...

Economic Ef ficiency The effort to making products and services in the least costly way without sacrificing excellence.

How does a firm maximize their total revenue, The definition of a price mak...

The definition of a price maker is states as “firm with some power to set the price bcoz the demand curve for its output slopes downward”, that in effect, mean those firms with a d

1, what is market equilibrium and disequilibrium?

what is market equilibrium and disequilibrium?

Supply, plese give me supply assigement

plese give me supply assigement

Q=8L^1/2, what is the profit maximising quantity of L

what is the profit maximising quantity of L

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