All firms in a competitive industry have cost C = q2 + 100

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All firms in a competitive industry have cost C = q2 + 100. Market demand is D = 240 − 3p.

a. Provide a pair of fully labelled diagrams showing "The Firm" and "The Industry" to illustrate and

quantify the adjustments in prices, quantities, profits and the number of firms that would be caused

by the introduction of a $20 per-unit tax. Show all calculations.

b. Revenue earned by the government will be _____________ dollars per firm.

c. TRUE or FALSE: "The amount earned by government (per firm) would be larger if this was an

Decreasing Cost Industry."