needing help with part C. i. & ii

c. You have been asked to write a report to the government analyzing the effects of the yearly license fee in the watch industry in the long run (many years from now). i. Without giving any precise numerical answers, what would you expect to happen to the watch industry in the long run under conditions set out in part (a)? Under the conditions in part (b)? Assume that the cost schedule above is also the long-run cost schedule, except for the possibility of the yearly license fee. ii. In which of the two cases (with the yearly fee or without the yearly fee) would you expect to observe a larger number of firms in the watch industry? In which of the two cases is output per firm higher? Output in the industry greater? Price of watches higher?1. Assume that the market for wrist watches is perfectly competitive and Rimex is a representative firm with the following short run cost structure: Output Total Cost MC Total Rev. Profit (Number ($) of Watches) 175 100 230 55 150 80 265 35 225 40 290 25 300 10 320 30 375 55 360 40 450 90 420 60 525 105 495 75 600 105 580 85 675 95 a. If the market price of watches is $75, how many watches will Rimex produce? What will be its profits? Rimex will have to produce & watches thus making a profit of $105. ABC b. The government is considering imposing a yearly license fee of $200 on every firm in the watch industry, regardless of output level. Explain what would happen in short run to i. Rimex's output, price and profits; and ii. industry price and output. Remix will not change its output decision because it will not affect quantity. The license fee of $200 will affect our profit because it will mean we will have a profit decrease of $200. As this is a short run, production of the number of watches will remain at 8