Long run eq, Microeconomics

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?
Posted Date: 4/8/2013 1:19:10 AM | Location : Canada







Related Discussions:- Long run eq, Assignment Help, Ask Question on Long run eq, Get Answer, Expert's Help, Long run eq Discussions

Write discussion on Long run eq
Your posts are moderated
Related Questions
Energies of the diametric molecules of a gas, chemistry assignments The analysis basis for treating these different types of motion can be seen by describing the motion of a di

Your company has a product that it is interested in marketing in a foreign country. Using one of the following Websites, click on a country of your choice to learn about Etiquette,

criticism of cournot model

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

MRTS and Marginal Productivity The change in output from change in labor equals:                     The change in output from change in capital equals

function with equation,variable,parameter

Using real life examples and the use of the following concepts: Effecient vs Ineffecient and Opportunity cost and increasing opportunity cost

Inflation Types Inflation is generally classified on the basis of its rate and causes, while rate-based classification of inflation refers to the severity of inflation or how h

BUREAUCRATIC PROBLEMS: Bureaucratic problems encountered as hurdles in the implementation of economic policies are listed below: • Low levels of efficiency, effectiveness,

Lorie teaches singing.Herr fixed cost are $1000 a month,and it costs her $50 of labor to give one class.the table shows the demand schedule for lorie''s singing lessons. Price