Quiz5_F10 - 0 150 80 1 1 170 75 2 2 195 70 3 3 230 65 4 4...

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3550 001 F10 Quiz 5 Last Name: _______ ___ First Name:_____________________ (True/False) 1.(2 points) The short run is any period of time less than one year, while the long run refers to a period of time one year or more in length. Explain your answer. 2. (8 points) Assume Johnson’s Pink Slip Company (specializing in pink women’s undergarments) has the following demand and total cost structure. (Hint: use the extra columns to get the information you need to answer the question). Demand Cost Schedule P Q TR MR Q TC MC MC+tax
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Unformatted text preview: 0 150 80 1 1 170 75 2 2 195 70 3 3 230 65 4 4 280 60 5 5 350 55 6 6 440 a. What is the profit maximizing level of output this firm should produce? b. Should they consider shutting down? Why or why not? c. If the firm's fixed costs rose by $100, how will the higher costs affect the profit maximizing level of output in the short-run? d. Going back to the original cost numbers (as for a. and b.). Now consider an excise tax of $25 per unit. Will this affect their profit maximizing level of output? If so, how?...
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This note was uploaded on 03/14/2012 for the course ECON 2243 taught by Professor Henryfors during the Spring '12 term at Abant İzzet Baysal University.

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