HOW WOULD A SALES TAX AFFECT THE EQUILIBRIUM AND OUTPUT AND PRICE OF FIRM UNDER MARGINAL COST AND AVERAGE COST PRICING PRINCIPLES? WITH EXPLANATION?

/in /by

HOW WOULD A SALES TAX AFFECT THE EQUILIBRIUM AND OUTPUT AND PRICE OF
FIRM UNDER MARGINAL COST AND AVERAGE COST PRICING PRINCIPLES? WITH
EXPLANATION?

You might also like
The market is unable to provide national defence efficiently.” Discuss this statement critically.
Saron spends 150 birr per month on coffee and cake at the cafeteria. A cup of coffee costs 15 birr and a cake costs 10 birr. a) Write the equation for Saron’s cafeteria budget constraint and draw it in a diagram. b) Assume that Saron never drinks coffee without eating one cake, and never eats cakes without drinking coffee. How much of each will she consume? Draw some of her indifference curves. c) What do we call goods that are always consumed in the same proportion?
A perfectly competitive firm is in equilibrium where marginal cost is equal to marginal revenue because
A firm faces the following linear inverse demand for its product P = 60 - 2Q. a) Find the firm's total revenue function TR (Q). (4 marks) b) Find the expression for the firm's marginal revenue. (2 marks) c) Assuming that the marginal cost of production is given by MC=8. What will be the equilibrium output and price?
Suppose consumers face the utility function: U (Xi, Yt) = XiYt; for i = 1, 2, ... ... ... ..., M Firms face the cost function: Cj(qj) = q2j + F (a) Solve for equilibrium in perfect competition. (b) Show the effect of change in income on equilibrium quantity.
A short run production function Q=L^3-2L^2-4L+40. Determine the amount of laborers used to maximize production.
Assume that you are the owner of a sports shoe shop in a shopping mall that sells Nike running shoes. From your till slips that indicate your annual sales and from a questionnaire answered by your customers you found the following: The potential amount of shoes that you can sell per year is 6 000 pairs, regardless of whether you change the prices of the shoes or not. If you adjust your price downwards or upwards by 1%, the consumers tend to buy 1.5% either more or less. Your supply curve indicates that you should always keep 500 units in stock and that a 1% change in the price of a pair of shoes tends to increase or reduce the sales of a pair of shoes by 0.5%. 1. Construct your shop's demand and supply functions for running shoes. 2. Calculate the price of a pair of shoes as well as the expected annual sales. 3 Determine the elasticity of demand of your shoes. 4 Would it be worthwhile for you to launch a sale at the end of the month, in other words, would it help you to increase your revenue?
A profit-maximising producer will hire labour to the point where [1] marginal revenue product equals the wage rate. [2] marginal revenue equals zero. [3] labour and capital costs are equalised [4] its marginal product equals marginal revenue.