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(Solved): Dami Inc. is a profit-maximizing firm in China that produces smartphone and exports output overseas ...
Dami Inc. is a profit-maximizing firm in China that produces smartphone and exports output overseas. This firm has profits n = R(q) - C(q) + sq, where q is output level, R(q) is the revenue function, C(q) is the cost function and s is a per unit subsidy rate by the Chinese government. Suppose the Chinese government raises the per unit subsidy rate. Discuss the impact on the firm's output level with economic models wherever necessary.