Question

Consider a market for cell phones. The demand and supply are defined by P = 400 -10 q, and P = 100 + 2q

Suppose now that the government requires each seller to pay a 60 tax for each cell phone. Compute the change in consumer surplus, change in producer surplus, the tax revenue, and the deadweight loss in the new equilibrium.

Suppose now that the government does not tax the seller, but instead the buyer to pay a $60 tax for each cell phone. What is the equation for the new demand curve? Compute the new equilibrium quantity, the price buyers pay, and the price sellers receive.

Answer #1

{Please give a like}

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...

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....

The market for apples is perfectly competitive, with the market
supply curve is given by P = 1/8Q and the market demand curve is
given by P = 40 – 1/2Q.
a. Find the equilibrium price and quantity, and calculate the
resulting consumer surplus and producer surplus. Indicate the
consumer surplus and producer surplus on the demand and supply
diagram.
b. Suppose the government imposes a 10 dollars of sale tax on
the consumer. What will the new market price...

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...

Let the market demand curve be QD=8-P
and the market supply curve be QS=P. Let
price P be measured in $/unit and let quantity Q
be measured in singular units (i.e. simple count).
Solve for the equilibrium price P* and
quantity Q*.
Now, assume the government imposes a $2/unit tax on consumers,
which leads to wedge/gap between the buyers’ price
Pb and the sellers’ price
PS.
Rewrite the demand and supply curves using Pb
and PS, respectively.
Write down the...

Consider the market for cigarettes. Suppose that the demand for
packs of cigarettes is given by ??=100−(20/3)? and supply is given
by ??=(80/3)?.
1. Solve for the equilibrium: ?∗ and ?∗.
2. Calculate consumer surplus, producer surplus, and total
surplus. Remember that the formula for the area of a triangle is ½
base times height.
3. Suppose that government wishes to discourage the use of
cigarettes. To do so, the government supposes a tax of $1 on
cigarette buyers. Calculate...

Suppose that the demand equation: P = 6 – Q and supply equation:
P = Q.
a. Calculate the price elasticity of demand at
equilibrium.
b. Calculate the equilibrium price and quantity, and consumer
surplus and producer surplus.
c. Suppose government imposes a unit tax of $1 on producers. Derive
the new supply curve and also calculate the new equilibrium price
and quantity.
d. Calculate tax revenue and the deadweight loss of this tax.

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,...

In a market with numerous sellers and buyers demand is given by
p=240-8q and supply is p=4+12q.
1. Find the equilibrium price and quantity.
2. Mathematically find the values for consumer and producer
surplus.
3. What is the deadweight loss in this market?
4. Suppose instead a monopolist served these same buyers, and
the monopolist had marginal cost curve 4+12q. a. Show graphically
the consumer surplus that consumers have lost due to monopoly. b.
Consumer surplus is lower for two...

The demand function for a product is given by p=80-0.5Q and the
supply function is p=50+0.25Q, where p is the price and Q is the
quantity. Suppose that the government impose a tax of $15 on every
unit sold.
a) Find equilibrium price and quantity before imposing the
tax.
b) Find price of buyer and seller and the quantity sold in the
market after tax.
c) Find the tax burden on buyer and seller.
d) Find government revenue and deadweight...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 4 minutes ago

asked 11 minutes ago

asked 12 minutes ago

asked 23 minutes ago

asked 28 minutes ago

asked 32 minutes ago

asked 36 minutes ago

asked 38 minutes ago

asked 41 minutes ago

asked 51 minutes ago

asked 51 minutes ago

asked 1 hour ago