competition


Question Description:

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competition 2 answers below » 3) The perfectly competitive blank compact disc industry is in long-run equilibrium, selling blank discs for $5 apiece. Now the government imposes an excise tax of $2 per disc produced. Show what happens to the price and output of discs in the short run. Now show the impact in the long run. Who pays the tax? (Note: Show quantities as Q 1 , Q 2 , etc.) 4) A monopoly firm has just taken over the blank compact-disc industry. There have been technological advances that have lowered production cost, but the monopoly firm charges a price greater than average total cost, even in the long run. As it turns View complete question » 3) The perfectly competitive blank compact disc industry is in long-run equilibrium, selling blank discs for $5 apiece. Now the government imposes an excise tax of $2 per disc produced. Show what happens to the price and output of discs in the short run. Now show the impact in the long run. Who pays the tax? (Note: Show quantities as Q 1 , Q 2 , etc.) 4) A monopoly firm has just taken over the blank compact-disc industry. There have been technological advances that have lowered production cost, but the monopoly firm charges a price greater than average total cost, even in the long run. As it turns out, the firm is still selling compact discs for $5. The government imposes an excise tax of $2 per disc produced. What happens to price? What happens to output? Compare your results to your answer in Problem 3 and explain. View less » Dec 07 2014 01:49 PM

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