--%>
Assignment Help - homework help

Question based on placing sales tax in long-run equilibrium

A competitive industry is in long-run equilibrium. Then a sales tax is placed on all firms in the industry. What do you suppose to happen to the price of the product, the number of firms in the industry, and the output of every firm?
Along with the imposition of sales tax on all of the firms, the marginal cost curve for each firm will shift up and to the left by the amount of the tax, and consequently the market supply curve shifts up and to the left. The shift supply curve will increase the price of the product and decrease the quantity supplied by each firm, in the market. In the short run firms will continue to generate as long as price is above average variable cost. In the long run, some firms might exit if price falls below the new long run average cost curve that has shifted up by the amount of the tax. As firms exit, the supply curve will shift up and to the left, resulting in higher price and lower quantity supplied.

   Related Questions in Biology

  • Q : Adnexal gland of digestive

    In addition to liver which is the other adnexal gland of digestive system which discharges substances in the duodenum contributing in extracellular digestion?

    		•
  • Q : Define cytoplasmic inclusions

    Cytoplasmic inclusions: Cytoplasmic inclusions are the cytoplasmic molecular aggregates, like pigments, organic polymers and crystals. They are not considered in cell organelles. Fat glycogen granules and drops and

    		•
  • Q : Describe corpus luteum What do you mean

    What do you mean by the term corpus luteum? Briefly illustrate it.

    		•
  • Q : Volition of the individual-Reactions of

    Concerning volition of the individual how reactions of the nervous system be categorized?

    		•
  • Q : Globalization of Business What is the

    What is the meaning of Globalization of Business and what is the reason many companies are in the process of expanding themselves?

    		•
  • Q : How pulmonary ventilation influence the

    How does pulmonary ventilation influence the carbon-dioxide concentration in the blood? What occurs to the carbon-dioxide concentration and to the blood pH whenever the respiratory frequency is either increased or decreased?

    		•
  • Q : Evolutionary novelty represented by

    Describe the main evolutionary novelty represented by annelids?

    		•
  • Q : What is Consignment stock Consignment

    Consignment stock: It is the material that is lying in the premises however is not owned by the company. It has no value allocated to it until it is taken into own stock. Once it is employed in production or to be sold, it is taken into its own stock.

    		•
  • Q : Presentation Communication -

    It is a formal, well-prepared talk on a specific topic delivered to a knowledgeable and interested audience. Generally, the tone used in presentation is serious and business like. The purpose is to give information or to persuade. In industry and commerce, the term 'presentation' has come

    		•
  • Q : What is Decision-Making Authority

    Decision-Making Authority: It is the ability of participants and the team as an entire to make key decisions concerning the project outcomes and to contain such decisions respected and upheld by the agencies they symbolize and also other decision maki

    		•