The long-run cost function for LeAnn's telecommunication firm is: A local telecommunication tax of $0.01 has been implemented for each unit LeAnn sells. This implies the marginal cost function becomes: If LeAnn can sell all the units she produces at the market price of $0.70, calculate LeAnn's optimal output before and after the tax. What effect did the tax have on LeAnn's output level? How did LeAnn's profits change?

Question

The long-run cost function for LeAnn's telecommunication firm is:  A local telecommunication tax of $0.01 has been implemented for each unit LeAnn sells. This implies the marginal cost function becomes:  If LeAnn can sell all the units she produces at the market price of $0.70, calculate LeAnn's optimal output before and after the tax. What effect did the tax have on LeAnn's output level? How did LeAnn's profits change?

Quizplus · Accepted Answer

The Answer of The long-run cost function for LeAnn's telecommunication firm is:  A local telecommunication tax of $0.01 has been implemented for each unit LeAnn sells. This implies the marginal cost function becomes:  If LeAnn can sell all the units she produces at the market price of $0.70, calculate LeAnn's optimal output before and after the tax. What effect did the tax have on LeAnn's output level? How did LeAnn's profits change?

The Long-Run Cost Function for LeAnn's Telecommunication Firm Is