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1.2 Corporate lump-sum tax with exogenous price Assume that the market price is constant, p = 50. Getting a permit to operate in this industry
1.2 Corporate lump-sum tax with exogenous price Assume that the market price is constant, p = 50. Getting a permit to operate in this industry costs a lumpsum tax/ fee equal to qb (phi). Draw the cost curves that include this fee and compare to the curves without fee. How different levels of gt affect the cost curves? How does the optimal quantity supplied by the rm depend on gab? What is the maximum amount of the fee that would be acceptable to the investor before he shuts down? 1.3 Unit tax without free entry Assume that the market price is constant, p = 50. Suppose that all rms must pay a unit tax (or royalty), equal to p (rho) per unit of production. Draw the cost curves that include this fee. How do these cost curves compare to the situation without the charge? How does the optimal quantity supplied by the rm depend on p
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