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Consider an industry with 100 identical firms. Each firm acts as a price taker and each has a cost function given by TC=200 + 4q
Consider an industry with 100 identical firms. Each firm acts as a price taker and each has a cost function given by TC=200 + 4q +2q^2. Suppose that demand in this market is given by Q subscript D= 800-5p.
Suppose in the short run, a per-unit tax of $12 is imposed. What is the new equilibrium quantity? What are the CS, PS, Tax revenue, and DWL after the tax?
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