Can you give step by step detailed answer please! 1. The handmade snuffbox indus

ID: 1177027 • Letter: C

Question

Can you give step by step detailed answer please!

1. The handmade snuffbox industry is composed of 100 identical firms, each having short-run total costs given by

STC= 0.5q^2+10q+5

and short-run marginal costs given by

SMC= q+10

A.What is the short-run supply curve for each snuffbox maker? What is the short-run supply curve for the market as a whole?

B. Suppose the demand for total snuffbox production is given by Q=1,100-50P

What is the equilibrium in this marketplace?

What is each firm's total short-run profit?

C. Graph the market equilibrium and compute total producer surplus in this case.

D. Show that the total proucer surplus you calculated in part c is equal to total indusry profits plus industry short-run fixed costs

E. Suppose now that the government imposed a $3 tax on snuffboxes. How would this tax change the market equilibrium?

F. How would the burden of this tax be shared between snuffbox buyers and sellers?

G. Calculate the total loss of producer surplus as a result of the taxation of snuffboxes. Show that this loss equals the change in

total short-run profits in the snuffbox industry. Why dont fixed costs enter into this computation of the change in short-run producer

surplus?

SR supply curve is MC cost so supply curve eq is P = q + 10

for whole market supply curve is summation of individual supply curve Q = 100 q + 1000 because there are 100 firms

for eq , supply = demand

q+ 10 = 22- Q/50

dind from this eq and price by putting Q