Asked by Jenney
Consider an oligopolistic market with two firms. Each of them produces using a cost function given by c(q)=q^2.
The aggregate demand in the market is given by 1000−p.
Suppose that, in order to increase production, the government gives the firms a $100 per-unit produced subsidy. The cost of the subsidy is financed with an identical lump-sum tax on consumers.
QUESTION: What is the total level of production in the market?
The aggregate demand in the market is given by 1000−p.
Suppose that, in order to increase production, the government gives the firms a $100 per-unit produced subsidy. The cost of the subsidy is financed with an identical lump-sum tax on consumers.
QUESTION: What is the total level of production in the market?
Answers
Answered by
aral
440
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