Essay
(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?
Correct Answer:
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a. Profit = (P - ATC)Q = (14 - 12)25,000...View Answer
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Correct Answer:
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