(Figure: Representative Firm I) Answer the following questions.
a. Suppose the market price is $14. How much profit is the firm making?
b. What is the long-run equilibrium price in this market?
c. Suppose the market price is $14 and the government levies a $50,000 tax on each firm. What will happen to the long-run equilibrium price? Will the industry expand or contract?

Question

(Figure: Representative Firm I) Answer the following questions.  
a. Suppose the market price is $14. How much profit is the firm making?
b. What is the long-run equilibrium price in this market?
c. Suppose the market price is $14 and the government levies a $50,000 tax on each firm. What will happen to the long-run equilibrium price? Will the industry expand or contract?

Quizplus · Accepted Answer

The Answer of (Figure: Representative Firm I) Answer the following questions.  
a. Suppose the market price is $14. How much profit is the firm making?
b. What is the long-run equilibrium price in this market?
c. Suppose the market price is $14 and the government levies a $50,000 tax on each firm. What will happen to the long-run equilibrium price? Will the industry expand or contract?

(Figure: Representative Firm I) Answer the Following Questions