Question

14) The supply of roses is unit elastic and the demand for roses is elastic. If a tax is imposed on roses, who pays a larger part of the tax? A) Demanders pay a larger part of the tax. B) Suppliers pay a larger part of the tax. C) Demanders and suppliers pay equal amounts of the tax. D) More information is needed about whether the tax is imposed on buyers or sellers. E) More information is needed about the magnitude of the tax to determine if demanders or suppliers pay a larger part of a tax. 15) If a perfectly competitive market becomes a monopoly, then the producer ____ and consumers ____. A) is unaffected; are unaffected B) is unaffected; lose C) gains; gain D) gains; lose E) gains; are unaffected

Answer #1

When is inelsatic and the demand is elastic, suppliers will pay larger part of the tax. This is because even a small increase in prices may impact demand (which may go down fast considering it is elastic) and the supplier will end up with perishabel inventory (as the supply is inelastic). Therefore, to keep buyers, the suppliers will bear a major part of the tax. Optioin B is correct

If a perfectly comopetitively market becomes a monopoly, then the producer gains and the customer loses. Option D is correct

2. Suppose supply is perfectly inelastic and demand is
relatively elastic. Who bear all the tax burden, buyers or sellers?
Explain in details.
3. Suppose demand for electricity is inelastic, but not
perfectly. A sales tax is imposed, and the tax is levied on buyers.
Draw a graph to show the effects of the tax. Indicate CS, PS, tax
revenue and DWL after tax on your graph.

4A
The price elasticity along a negatively sloped linear demand
curve
1 changes at every point
2 is less than 1
3IS INFINITE
4 is equal to 1
5 is zero
28A
If demand curve is more elastic relative to supply
sellers pay a larger portion of the excise tax.
B.
consumer price increases by the amount of the tax.
C.
entire burden of the tax is borne by the sellers.
D.
sellers pay a smaller portion of the excise...

Suppose there is a market at its competitive equilibrium.
Demand p = 100 - QD
Supply p = 20 + (QS /3) The government introduces a subsidy of s
= $4 per unit of the good sold and bought.
(a) Draw the graph for the demand and supply before subsidy.
(b) What is the equilibrium price and quantity before the
subsidy and after the subsidy?
(c) Looking at the prices buyers pay and sellers receive after
the subsidy compared to...

Market demand for calculators is P = 300 – 3Q and market supply
is P = 20 + 2Q. A) Calculate market equilibrium price and quantity.
B) How many calculators will be traded if a $10/unit sales tax is
implemented? C) Does it matter if we impose this tax on suppliers
or consumers? Why? D) At market equilibrium, is demand more or less
elastic than supply? E) Calculate the effects of the tax on
consumer surplus, producer surplus, tax revenue,...

Suppose demand and supply can be characterized by the following
equations:
Qd = 6 – 2P
Qs = P
Price is in dollars; quantity is in widgets.
For parts (a) and (b), assume there is no tax. Show your work
for each step below.
Find the equilibrium price and quantity algebraically.
Calculate the following:
consumer surplus
producer surplus
total firm revenue
production costs
For parts (c) and (d), assume a tax of $1.50 per widget sold is
imposed on sellers....

For which pairs of goods is the cross-price elasticity most
likely to be negative?
a.
Ipads and laptops
b.
pens and pencils
c.
hamburgers and french fries
d.
coffee and baseballs
Suppose gasoline prices rise and remain high in the future. As a
result, drivers typically will
a.
reduce their quantity demanded of gasoline more in the long run
than in the short run.
b.
not reduce their quantity demanded in the short run nor the long
run.
c.
increase...

Using the following information to calculate a)-n). Demand: P =
45- ½ Q Supply: P = 2Q
a) P*=_________
b) Q*=_________
c) Initial Consumer Surplus=__________
d) Initial Producer Surplus=__________
e) Total Surplus =_________________
Now the government imposes a $15 per unit tax on consumers.
Calculate the following.
f) Tax Distorted Competitive Equilibrium Quantity=_____
g) Price (consumers pay with tax)=________
h) Price (producers get with tax)=________
i) Consumer surplus with tax=_________
j) Producer surplus after tax=__________
k) Tax Revenue=_____________
l) Total...

1) Suppose Demand for Apples (in bushels) is given by Q = 90-P
and Supply is given by Q = P. The market for apples is dominated by
a single, monopolistic firm "NYC Apples". What is NYC Apples profit
at the monopoly price? 2) Suppose Demand for Apples (in bushels) is
given by Q = 90-P and Supply is given by Q = P. The market for
apples is dominated by a single, monopolistic firm "NYC Apples".
How much more...

1. When looking at a graph, the area below the demand curve and
above market price is defined as
a. producer
surplus d. tax
revenue.
b. consumer
surplus
e. business
profit.
c. producer
benefit.
2. LDT Products, Inc., designs and sells flannel jackets. The
company is willing to sell a men’s flannel jacket for as little as
$45. Its main competitor is MK Outriggers, which is willing to sell
the same men’s flannel jacket for as little as $40. The current
market price of that...

Suppose the demand and supply curves for a large specialty
pizza are given by:
Qd = 120 – 10P
Qs = -30 + 5P.
Using the demand and supply functions above, the equilibrium
price of a pizza is ____, and the equilibrium quantity is ____.
Illustrate your answer.
Compute Price elasticity of demand and supply at this
equilibrium.
Compute CS and PS and illustrate on a graph.
Suppose that the government decrees that a specialty cannot be
sold above $8....

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 1 minute ago

asked 6 minutes ago

asked 13 minutes ago

asked 28 minutes ago

asked 30 minutes ago

asked 32 minutes ago

asked 41 minutes ago

asked 54 minutes ago

asked 59 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago