Suppose the Environmental Protection Agency sets new requirements that raise the (fixed) costs of report- ing compliance

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Suppose the Environmental Protection Agency sets new requirements that raise the (fixed) costs of report- ing compliance with pollution control rules (Pashigian 1984). How would this change affect

(a) the market price,

(b) the number of fringe firms,

(c) total output, and

(d) the dominant firm's share of the market? Hint: What does an increase in fixed costs do to the average cost curve of a fringe firm?

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Modern Industrial Organization

ISBN: 9780321011459

3rd Edition

Authors: Dennis W. Carlton, Jeffrey M. Perloff

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Question Posted: Nov 25, 2024 02:00 AM

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Suppose the Environmental Protection Agency sets new requirements that raise the (fixed) costs of report- ing compliance

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Modern Industrial Organization

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