6. All firms in a competitive industry have cost C = q² + 100. Market demand is D = 240 - 3p. a. Provide a pair of fully labelled diagrams showing "The Firm" and "The Industry" to illustrate and quantify the adjustments in prices, quantities, profits and the number of firms that would be caused by the introduction of a $20 per-unit tax. Show all calculations. b. Revenue earned by the government will be dollars per firm. C. TRUE or FALSE: "The amount earned by government (per firm) would be larger if this was an Decreasing Cost Industry."

6. All firms in a competitive industry have cost C = q² + 100. Market demand is D = 240 - 3p. a. Provide a pair of fully labelled diagrams showing "The Firm" and "The Industry" to illustrate and quantify the adjustments in prices, quantities, profits and the number of firms that would be caused by the introduction of a $20 per-unit tax. Show all calculations. b. Revenue earned by the government will be dollars per firm. C. TRUE or FALSE: "The amount earned by government (per firm) would be larger if this was an Decreasing Cost Industry."

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Monopoly

Section: Chapter Questions

Problem 10PA

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