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Title: In the long-run equilibrium of a competitive market, the market supply and demand are: Supply: P = ...
Post by: corie on Oct 24, 2017
In the long-run equilibrium of a competitive market, the market supply and demand are:
   Supply:       P =  30 + 0.50Q
   Demand:      P = 100 - 1.5Q,        
where P is dollars per unit and Q is rate of production and sales in hundreds of units per day.  A typical firm in this market has a marginal cost of production expressed as:
   MC = 3.0 + 15q.

a.   Determine the market equilibrium rate of sales and price.
b.   Determine the rate of sales by the typical firm.
c.   Determine the economic rent that the typical firm enjoys. (Hint: Note that the marginal cost function is linear.)
d.   If an output tax is imposed on ONE firm's output such that the ONE firm has a new marginal cost (including the tax) of:       
      MCt = 5 + 15q,
what will the firm's new rate of production be after the tax is imposed?  How does this new production rate compare with the pre-tax rate?  Is it as expected?  Explain.  Would the effect have been the same if the tax had been imposed on all firms equally?  Explain.


Title: Re: In the long-run equilibrium of a competitive market, the market supply and demand are: Supply: P ...
Post by: boransal on Oct 24, 2017
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Title: Re: In the long-run equilibrium of a competitive market, the market supply and demand are: Supply: P ...
Post by: Вера Ларионова on Oct 9, 2019
спасибо