Homework-7 - Econ 501 Homework Assignment 7 Due Tuesday...

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Econ 501 Homework Assignment 7 Due Tuesday March 4th 1. BB 9.18 A competitive industry consists of 6 type A firms and 4 type B firms. Each firm of type A operates with the supply curve: 10 S A QP = −+ if P>10, and 0 otherwise. Each firm of type B operates with the supply curve: 2 S B = for P>=0. a) Suppose the market demand is 108 10 D M =− . At the market equilibrium, which firms producing, and what is the equilibrium price? b) Suppose the market demand is 228 10 D M . At the market equilibrium, which firms producing, and what is the equilibrium price? 2. BB 10.9 Suppose that the market for cigarettes in a particular town has the following supply and demand curves: ; 50 SD Q P == , where the quantities are measured in thousands of units. Suppose the town council needs to raise $300,000 in revenue and decides to do this by taxing the cigarette market. What should the excise tax be in order to raise the required amount of money? 3. BB 10.12 In a perfectly competitive market, the market demand curve is given by 200 5 dd
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Homework-7 - Econ 501 Homework Assignment 7 Due Tuesday...

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