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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
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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