If the deadweight loss of a tax is zero the consumer and producer surplus are th

Question

If the deadweight loss of a tax is zero the consumer and producer surplus are the sam as before the imposition of the tax. True or False. 9. 10. Assuming fixed input prices, an increase in the price of the output will result in an increase in the profits of the firm. True or False. 11. Young del Mar, who consumes only corn chips and french fries. His utility functioni is 11(x, x2) = min/rr+ 2n, 2, + x2/ where x1 is his consumption of corn chips and his consumption of french fries. a) If the price of corn chips is pi 3, the price of french fries is p 2, and income is

Explanation / Answer

Q10
Answer
True
the input prices are fixed, and output price increases that will increase profit because
Profit=(P-ATC)*Q
the ATC will be same or reduce(because the input prices are fixed) but the price is increasing as well as the quantity so the product of (P-ATC)*Q will be more which means profit will increase.

where,

TC=fixed input cost+variable input cost

ATC=TC/Q

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.