Consider a perfectly competitive market in which the government can impose a per-unit tax t ?

Consider a perfectly competitive market in which the government can impose a per-unit tax t ? 0

Imagine that we can predict the equilibrium price that consumers pay for each level of t and that this is

given by pc(t) = 5t + 3 Suppose that all firms in the market are identical and that the supply function of 2

each firm is q?(p) = p + 2 The government is currently setting t = 2 Calculate the effect of a marginal increase in t on the profit that each firm makes in equilibrium

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