Firm Hypothesis 1.1 My product is a bakery that produces cakes. The product function is Q=F{L.C}. Q is the quantity of cakes being produced. L is for the quantity of labor so the number of workers. C is the quanlity of capital like bakery equipment. and F is the lunction itself that species how L and C are combined to produce cakes. Representation of the production function is O=2L+SC. I am assuming t5hw workers can make 2 cakes and each unit of capital can make 3 cakes. The coefcients 2 and 3 represent productivity 1.2 TC=1OU+0"2 -n I" (-1 in: .. s t' is u- a 60 3 d on in 8 H 3 8 a u [1 point] Industry Hypothesis. 2.1.[05 points] Define the supply and demand curves for the industry {show the equations] and the priceelasticity of demand {you can represent an imaginary situation}. For example, the demand curve for the industry is Q\"=50ij_1 DP and the supply curve is QS=2OD+10R Graph the curves (numerical, graphical and verbal answers]. 2.2. [I125 points] Show the equilibrium price and quantity (numerical. graphical and verbal answers}. 2.3. [0.25 points} Show the consumer and producer surplus in a graph and calculate their value (numerical, graphical and verbal answers}. [1 point] Tut Hypothesis. Due to the corona crisis the government places a "disaster tax" on producers by chargmg X dollars (you decide the ampunti per unit 3.1. [0.25 points] Find the equilibrium price paid by consumers, the equilibrium price received by producers and the equilibrium quantity of product sold after taxation [numerical and verbal answers}. 3.1. [0.5 points] How do producers and consumers share the tax burden? (numerical, graphical and verbal answers]. 3.2.[t125 points] Compute the tart revenue collected by the government and locate.- il in a figure (numerical, graphical and verbal answers]