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2) The cost function for Acme Laundly is C (q) = 10 + 10:; + qz, where q is tons of laundry cleaned. Assume that
2) The cost function for Acme Laundly is C (q) = 10 + 10:; + qz, where q is tons of laundry cleaned. Assume that the market is perfectly competitive. a. What q should the rm choose to maximize its prot if the market price is p? How much does it produce if p=5 0? b. Assume that the government imposes a per unit tax of 1 =2. How much should the rm produce to maximize its after-tax prot if the market price is p? How much does it produce if p=50
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