Problem 1
If \(S_{1}(p)=p-10\) and \(S_{2}(p)=p-15,\) then at what price does the industry supply curve have a kink in it?
Problem 2
In the short run the demand for cigarettes is totally inelastic. In the long run, suppose that it is perfectly elastic. What is the impact of a cigarette \(\operatorname{tax}\) on the price that consumers pay in the short run and in the long run?
Problem 3
True or false? Convenience stores near the campus have high prices because they have to pay high rents.
Problem 4
True or false? In long-run industry equilibrium no firm will be losing money.
Problem 7
A New York City cab operator appears to be making positive profits in the long run after carefully accounting for the operating and labor costs. Does this violate the competitive model? Why or why not?
