This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: A firm observes that in order to minimize the average cost, it must produce 25,000 units of output. ... (Read 26 times)

ghost!

  • Hero Member
  • *****
  • Posts: 560
on: Jul 1, 2018
A firm observes that in order to minimize the average cost, it must produce 25,000 units of output. Suppose the government imposes a specific tax on the output of the firm.
 
  Will the output level required to minimize the average cost increase, decrease, stay the same or is it uncertain? Can you tell how much the minimum average cost will change by? Explain.

Question 2

A new law applied to a competitive market that requires that laid off workers be paid a large severance payment will
 
  A) not generate a deadweight loss.
  B) increase total welfare.
  C) increase consumer surplus in the market.
  D) decrease consumer surplus in the market.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

gcook

  • Sr. Member
  • ****
  • Posts: 343
Reply #1 on: Jul 1, 2018
Answer to Question 1

The specific tax results in a parallel vertical shift of the average cost by the amount of the tax. Therefore, the minimum point will shift up by precisely the tax. The output level which minimizes the average cost will not change.

Answer to Question 2

D


ghost!

  • Member
  • Posts: 560
Reply 2 on: Jul 1, 2018
Wow, this really help

tranoy

  • Member
  • Posts: 344
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

Looking at the sun may not only cause headache and distort your vision temporarily, but it can also cause permanent eye damage. Any exposure to sunlight adds to the cumulative effects of ultraviolet (UV) radiation on your eyes. UV exposure has been linked to eye disorders such as macular degeneration, solar retinitis, and corneal dystrophies.

Did you know?

Many people have small pouches in their colons that bulge outward through weak spots. Each pouch is called a diverticulum. About 10% of Americans older than age 40 years have diverticulosis, which, when the pouches become infected or inflamed, is called diverticulitis. The main cause of diverticular disease is a low-fiber diet.

Did you know?

Thyroid conditions cause a higher risk of fibromyalgia and chronic fatigue syndrome.

Did you know?

Although puberty usually occurs in the early teenage years, the world's youngest parents were two Chinese children who had their first baby when they were 8 and 9 years of age.

Did you know?

Calcitonin is a naturally occurring hormone. In women who are at least 5 years beyond menopause, it slows bone loss and increases spinal bone density.

Killer Whale - Size comparison to an average human. Killer Whale - Size comparison to an average human.
Tubal ligation. To minimize the size of the incisions necessary, laparoscopic surgery may be used to Tubal ligation. To minimize the size of the incisions necessary, laparoscopic surgery may be used to
General structure of eukaryotic pre-rRNA transcription units General structure of eukaryotic pre-rRNA transcription units
Typical Startup Cost Categories Cont. Typical Startup Cost Categories Cont.
A simplified overview of the genes and regulatory units involved in the control of lactose metabolis A simplified overview of the genes and regulatory units involved in the control of lactose metabolis
opener E. coli have been genetically engineered to produce lycopene opener E. coli have been genetically engineered to produce lycopene
Video: Adolescent Diabetes

For a complete list of videos, visit our video library