Explore BrainMass

Explore BrainMass

    #14 Long-Run Equilibrium - Competitive markets

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    In a competitive market with a downward sloping demand curve, a tax that increases the fixed cost of every firm will:

    a) reduce the number of firms supporting long run equilibrium

    b) increase the long-run equilibrium price.

    c) not cause the number of firms supporting long-run equilibrium to change

    d) answers a and b

    e) answers b and c

    © BrainMass Inc. brainmass.com March 4, 2021, 5:57 pm ad1c9bdddf
    https://brainmass.com/economics/general-equilibrium/14-long-run-equilibrium-competitive-markets-20234

    Solution Preview

    The correct answer is (d). If a tax is imposed which increases the fixed ...

    $2.49

    ADVERTISEMENT