A good is produced in a perfectly competitive market. Assume that there are 20 identical firms in 2 Further suppose the

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A Good Is Produced In A Perfectly Competitive Market Assume That There Are 20 Identical Firms In 2 Further Suppose The 1 (215.48 KiB) Viewed 14 times

A good is produced in a perfectly competitive market. Assume that there are 20 identical firms in 2 Further suppose the industry and that they each have a cost function of C(q) = q + 4q + 2 = x y that there is a representative consumer with utility function u(x, y) where x is the main good and y is another good. This consumer's preferences represent all consumers in the market. .5 .75 a. Solve for the market demand function for the good. Assume that the cost of good y is $6 and that the income of the representative consumer is $36. If you can't solve for this, specify a demand function for the representative consumer in order to solve the rest of the problem. b. Solve for the industry supply function. c. Solve for the equilibrium price and quantity. d. What is the quantity produced under a $1 sales tax?