In problem, suppose the city imposes a sales tax of $6 per widget. a. In the short

Question:

In problem, suppose the city imposes a sales tax of $6 per widget.

a. In the short run, what is the new price of a widget?
b. In the long run, what is the new price of a widget?
c. In the long run, how many firms leave theindustry?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Price theory and applications

ISBN: 978-0538746458

8th edition

Authors: Steven E landsburg

See More Books

Question Posted: Jan 24, 2013 08:17 AM

See More Questions

A state imposes a sales tax of 6 percent. The states counties are permitted to levy an additional tax of 2 percent. The state administers the tax for the counties, forwarding the proceeds to the...
A state imposes a sales tax of 6 percent. The state's counties are permitted to levy an additional tax of 2 percent. The state administers the tax for the counties, forwarding the proceeds to the...
In Problem, suppose the city imposes an excise subsidy of $3 per widget. (That is, widget manufacturers receive $3 from the government for each widget they produce.) a. In the short run, what is the...
Solve exponential equation. Express irrational solutions in exact form and as a decimal rounded to three decimal places. 2 2x + 2 x - 12 = 0
Would the following examples of reproductive isolation be considered a prezygotic or postzygotic mechanism? A. Horses and donkeys can interbreed to produce mules, but the mules are infertile. B....
The Clear Water Company would be permitted to borrow up to 65% of its current account receivables balance of $750,000 for 90 days. The annual interest rate would be 12 percent due at maturity. The...
Do marketing employees use appropriate marketing planning and controlling tools and techniques?
At the beginning of each year, the Accounting Department at Moon Glow Lighting, Ltd., must find the point at which projected sales revenue will equal total budgeted variable and fixed costs. The...
During the current year, merchandise is sold for $61,200 cash and for $89,430 on account. The cost of the goods sold is $97,910. What is the amount of the gross profit? $
The trial balance of Alagoass Boutique at December 31 shows Inventory R$21,000, Sales Revenue R$156,000, Sales Returns and Allowances R$4,000, Sales Discounts R$3,000, Cost of Goods Sold R$92,400,...
In Problem, suppose that the city imposes a license fee of $11 per firm. a. In the short run, what is the new price of a widget? b. In the long run, what is the new price of a widget? c. In the long...
In Problem, suppose that the demand for widgets doubles (so that, for example, on the new demand curve, prices of $2, $3, and $5 go with quantities of 1,000, 800, and 600). a. In the short run, what...
Find the distance between the point (3, -2, 4) and the plane 2x - 5y + z = 10.
The equation for the standard normal curve (the normal curve with mean 0 and standard deviation 1) graphs as an exponential curve. Graph this curve, whose equation is \[y=\frac{e^{-x^{2} /...
Design an undirected network with N=7 and L=12. Based on how you drew your network, classify it as either fully connected ,random, or scale-free. Justify your decision with a short paragraph response.
Use the Ch08_AviaCo database shown in Figure P8.35 to work Problems 3546. Modify the MODEL table to add the attribute and insert the values shown in the following table. Table P8.35 Attribute and...
The Tip Calculator app does not need a Button to perform its calculations. Reimplement this app to use property listeners to perform the calculations whenever the user modifies the bill amount or...
A particle, carrying a positive charge of $4 \mathrm{nC}$, located at $(5 \mathrm{~cm}, 0)$ on the $x$-axis experiences an attractive force of magnitude 115.2 $\mathrm{N}$ due to an unknown...
Edward Locker deposited $\$ 12,000$ in a savings account that earns interest at an annual rate of $12 \%$, compounded quarterly. The $\$ 12,000$ plus earned interest must remain in the account...
You are standing at x = 9.0 km and your assistant is standing at x = 3.0 km. Lightning bolt 1 strikes at x = 0 km and lightning bolt 2 strikes at x = 12.0 km. You see the flash from bolt 2 at t = 10...
According to the Conceptual Framework for Financial Reporting (2010) , which of the following is not an enhancing qualitative characteristic of information in financial statements? A. Accuracy. B....
The cash flows for three alternatives are as follows: (a) Based on payback period, which alternative should be selected? (b) Using future worth analysis, and a 12% interest rate, determine which...
Three mutually exclusive alternatives are being considered: At the end of its useful life, an alternative is not replaced. If the MARR is 10%, which alternative should be selected: (a) Based on the...
(a) Based on future worth analysis, which of the four alternatives is preferred at 6% interest? (b) Based on future worth analysis, which alternative is preferred at 15% interest? (c) Based on the...
Cash from Operating Activities: ______________ Cash from Investing Activities: ______________ Cash from Financing Activities: ______________ Problem 2: Financial Ratios The GAP Macys 1 Current Ratio...
On January 1, 2021, Winky Enterprises issued 12% bonds dated January 1, 2021, with a face amount of $2,800,000. The bonds mature in 2030 (10 years). For bonds of similar risk and maturity, the market...
Using the following accounts and balances, prepare the stockholders' equity vection of the balance sheet. Pilty thousand shares of common stock are authorised, and 1,000 shares have been recoured,...

In problem, suppose the city imposes a sales tax of $6 per widget. a. In the short

Question:

Industry-Wide Demand Price Firm's Marginal Cost Curve Quantity Marginal Cost $2 Quantity 500 400 300 200 100 $2 4 12 12 25 10 15 15

Step by Step Answer:

a Original equilibrium is at quantity 300 New equilibrium must be at ...View the full answer

Price theory and applications

Students also viewed these Economics questions