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andres jimenez
on Oct 14, 2024

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Suppose that the garden gnome industry was in long-run equilibrium as described in Problem 1.On January 1, 1993, the cost of plaster and labor remained at $7 per gnome, gnome molds still cost $1,000, and the interest rate remained at 10%, but the government introduced a tax of $9 on every garden gnome sold.Then the equilibrium price of garden gnomes in 1993 would be

A) $16.
B) $9.
C) $18.
D) $9.20.
E) $25.

Long-Run Equilibrium

A state in which all factors of production and outputs are fully adjusted to each other, and all economic forces are in balance, with no surplus or shortage.

Plaster

A mixture of lime or gypsum with sand and water that hardens when dried, used for coating walls and ceilings.

Labor

The engagement of human abilities, both physical and mental, in crafting goods and services.

  • Discerning the repercussions of fiscal impositions and sanctions by government entities on equilibrium market pricing.
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Shelby BlechOct 17, 2024
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