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

Americas Dependency on China, What will be the effects of americas dependen...

What will be the effects of americas dependency on china?

Economic growth, Summarize the four supply factors in economic growth.

Summarize the four supply factors in economic growth.

Steps of the basic analytical framework in modern economics, What are the s...

What are the steps of the basic analytical framework in Modern Economics? Framework is very significant to master this fundamental analytical framework, particularly, these fiv

Opportunity cost, meaning of opportunity cost under theory of cost

meaning of opportunity cost under theory of cost

Central planning of economic system, Q. Central Planning of economic system...

Q. Central Planning of economic system? Central Planning: An economic system in that crucial decisions regarding consumption, investment, exchange rates, interest rates and pri

Natural resource economics, Normal 0 false false false ...

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

Formation of nitrobenzene , reaction of mechanism of nitrous acid with benz...

reaction of mechanism of nitrous acid with benzene diazonium chloride in presence of Cuperous oxide

Production possibility curve, draw a production possibility frontier task u...

draw a production possibility frontier task using the graph and value and identity the pareto efficent and inefficient point and the marginal oppotunity cost of x for each point of

Welfare analysis, Welfare Analysis 1-Of the following four institution...

Welfare Analysis 1-Of the following four institutions for allocating apartment to different people at different prices   i.  The competitive market  ii.  A discriminatin

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