Suppose the government imposes a 4 dollar tax on each unit of good produced by each firm. Each firm's cost function is now C(g) = 200 + 4g + q*/2, where the 4q reflects the tax payment. What is each firm's new supply function? Oq = p+ 40 Oq = p-40 Oq = p- 4 Oq = Suppose we are in a short-run equilibrium after the government tax and there are no firm entrants/exits. What is the new equilibrium price and market-level quantity? Note that the market-level demand curve is still the same, Qp = 2000 – 50p. Op = 16, q = 500 Op = 20, q = 800 Op = 22, q = 900 Op = 24, q = 1000 Suppose we are now in a new long-run equilibrium with the government taxes in place. Relative to the short-run equilibrium after the tax, which of the following statements is true? Oprice decreases, market-level quantity increases, and each firm's quantity increases Oprice increases, market-level quantity decreases, and each firm's quantity increases Onew firms enter the market

Suppose the government imposes a 4 dollar tax on each unit of good produced by each firm. Each firm's cost function is now C(g) = 200 + 4g + q*/2, where the 4q reflects the tax payment. What is each firm's new supply function? Oq = p+ 40 Oq = p-40 Oq = p- 4 Oq = Suppose we are in a short-run equilibrium after the government tax and there are no firm entrants/exits. What is the new equilibrium price and market-level quantity? Note that the market-level demand curve is still the same, Qp = 2000 – 50p. Op = 16, q = 500 Op = 20, q = 800 Op = 22, q = 900 Op = 24, q = 1000 Suppose we are now in a new long-run equilibrium with the government taxes in place. Relative to the short-run equilibrium after the tax, which of the following statements is true? Oprice decreases, market-level quantity increases, and each firm's quantity increases Oprice increases, market-level quantity decreases, and each firm's quantity increases Onew firms enter the market

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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