3.(9N10.8)  Suppose that the long-run total cost function for the typical mushroom producer is given by: ( , ) 2 cqw wq q =-+ 10 100 where q is the output of the typica1 firm and w represents the hourly wage rate of mushroom pickers. Suppose also that the demand for mushrooms is given by Q = -1,000P+ 40,000 where Q js total quantity demanded and P is the market price of mushrooms. A. If the wage rate for mushroom pickers is $1, what will be the long-run equilibrium output for the typical mushroom picker? B. Assuming that the mushroom industry exhibits constant costs and that all firms are identical, what will be the long-run equilibrium price of mushrooms, and how many mushroom firms will there be? ( , ) 2 C. Suppose the government imposed a tax of $3 for each mushroom picker hired (raising total wage costs, w, to $4). Assuming that the typical firm continues to have costs given by:   cqw wq q =-+ 10 100 how will your answers to parts (a) and (b) change with this new, higher wage rate?

3.(9N10.8)  Suppose that the long-run total cost function for the typical mushroom 
producer is given by: 
( , )
 2
 cqw wq q
 =-+
 10 100
 where q is the output of the typica1 firm and w represents the hourly wage rate of 
mushroom pickers. Suppose also that the demand for mushrooms is given by 
Q = -1,000P+ 40,000 
where Q js total quantity demanded and P is the market price of mushrooms. 
A. If the wage rate for mushroom pickers is $1, what will be the long-run equilibrium 
output for the typical mushroom picker? 
B. Assuming that the mushroom industry exhibits constant costs and that all firms are 
identical, what will be the long-run equilibrium price of mushrooms, and how many 
mushroom firms will there be? 
( , )
 2
 C. Suppose the government imposed a tax of $3 for each mushroom picker hired (raising 
total wage costs, w, to $4). Assuming that the typical firm continues to have costs given 
by:   
cqw wq q
 =-+
 10 100
 how will your answers to parts (a) and (b) change with this new, higher wage rate?