Question
Consider a firm in a competitive industry with marginal cost, MC = 10+5q,Average Variable cost, AVC = 10+2.5q and fixed costs equal 100 where q
Consider a firm in a competitive industry with marginal cost, MC = 10+5q,Average Variable cost, AVC = 10+2.5q and fixed costs equal 100 where q equals output.You should assume that the market price is 60.
a.How much will the firm produce?
b.What are economic profits/losses?
c.Suppose the government introduces a fixed license fee of 100.What is output now?
d.What are economic profits with the license fee in c.
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Puzzle Of Latin American Economic Development
Authors: Patrice Franko
2nd Edition
0742524663, 9780742524668
