Question

In the Challenge​ Solution, would it make a difference to the analysis whether the​ lump-sum costs such as registration fees are collected annually or only once when the firm starts​ operation? How would each of these franchise taxes affect the​ firm's long-run supply​ curve? The Federal Motor Carrier Safety Administration​ (FMCSA) along with state transportation agencies in 38 states administer interstate trucking licenses through a Single State Registration System. ​ However, the registration process is​ complex, time​ consuming, and expensive. There are many fees and costly regulations that a trucker or firm must meet to operate. For​ example, for a large​ truck, the annual federal interstate registration fee can exceed​ $8,000. These largely​ lump-sum costswhich are not related to the number of miles drivenhave increased substantially in recent years. What effect do these new fixed costs have on the trucking market price and​ quantity? Are individual firms providing more or fewer trucking​ services? Does the number of firms in the market rise or​ fall? The Challenge Solution suggests the market price will increase and the market quantity will decrease. ​ Further, the number of firms in the market will​ fall, although each firm remaining in the market will produce more. Instead of being collected​ annually, if the​ lump-sum costs are collected only once​ (when the firm starts​ operation), then

Answer 1

The answer is "nothing changes because the fees would still be fixed costs."

Step-by-step explanation:

When annual expenses throughout the cash payment are recovered, a long-term delivery curve of both the company will change.

When the lump sum costs are still only obtained once, the long-term supply curve shall be changed.

It is because, regardless of how it is paid, this tv license has little effect mostly on low cost but only a fixed cost. Its amount of output relies on how well the cost of the profit changes. Provided these are fixed costs, their performance doesn't matter.