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Suppose that introductory chemistry books are produced in a constant cost perfectly competitive industry. All firms face the same long-run average cost curve which has its minimum point at the same level of output and average cost as in the short-run. The demand for economics textbooks is: P 170- 0.04Q Fixed costs in the short-run are $300. The short-run total cost curve of each firm is given by: TC= 400 + 5q + q?. Below what price will this firm shut down in the short-run? Below what price will this firm shut down in the long-run?

Suppose that introductory chemistry books are produced in a constant cost perfectly competitive industry. All firms face the same long-run average cost curve which has its minimum point at the same level of output and average cost as in the short-run. The demand for economics textbooks is: P 170- 0.04Q Fixed costs in the short-run are $300. The short-run total cost curve of each firm is given by: TC= 400 + 5q + q?. Below what price will this firm shut down in the short-run? Below what price will this firm shut down in the long-run?

Micro Economics For Today
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter8: Perefect Competition
Section: Chapter Questions
Problem 12SQP
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Suppose that introductory chemistry books are produced in a constant cost perfectly competitive industry. All firms face the same long-run average cost curve which has its minimum point at the same level of output and average cost as in the short-run. The demand for economics textbooks is: P 170 - 0.04Q Fixed costs in the short-run are $300. The short-run total cost curve of each firm is given by: TC= 400+5q+ q?. Below what price will this firm shut down in the short-run? Below what price will this firm shut down in the long-run? Now, the government imposes a production tax of $86 per textbook. What is the buyer's share (in percent) of this $86 tax in the long-run? What is the number of firms in the long-run?
Transcribed Image Text:Suppose that introductory chemistry books are produced in a constant cost perfectly competitive industry. All firms face the same long-run average cost curve which has its minimum point at the same level of output and average cost as in the short-run. The demand for economics textbooks is: P 170 - 0.04Q Fixed costs in the short-run are $300. The short-run total cost curve of each firm is given by: TC= 400+5q+ q?. Below what price will this firm shut down in the short-run? Below what price will this firm shut down in the long-run? Now, the government imposes a production tax of $86 per textbook. What is the buyer's share (in percent) of this $86 tax in the long-run? What is the number of firms in the long-run?
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