In an economy, a manufacturing company produces 1,000 units of a product at a total cost of $10,000. If the government imposes a tariff of $2 per unit on imported raw materials used in production, and the company is also subject to a corporate tax rate of 15%, calculate the new total cost of production after considering the cost of tariff and taxation. Assume no other costs are affected.

In an economy, a manufacturing company produces 1,000 units of a product at a total cost of $10,000. If the government imposes a tariff of $2 per unit on imported raw materials used in production, and the company is also subject to a corporate tax rate of 15%, calculate the new total cost of production after considering the cost of tariff and taxation. Assume no other costs are affected.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.10P

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