Question

Suppose that a market has the following demand and supply functions (normal): Qd = 10-P and...

Suppose that a market has the following demand and supply functions (normal): Qd = 10-P and Qs = 2P-2.

If the government imposed a $3/unit excise tax on producers in this market, what would be the value of producer surplus?

If the government imposed a $3/unit excise tax on producers in this market, what would be the value of consumer surplus?

If the government imposed a $3/unit excise tax on producers in this market, what would be the DWL?

If the government imposed a $3/unit excise tax on producers in this market, what would be the new price that producers receive?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. Subsidy. The market demand and supply functions for cotton are: Qd = 10 - .04P...
1. Subsidy. The market demand and supply functions for cotton are: Qd = 10 - .04P and Qs = 38P - 20 a.     Calculate the consumer and producer surplus. To assist cotton farmers, suppose a subsidy of $0.10 a unit is implemented. b.     Calculate the new level of consumer and producer surplus. c.      Did the increase in consumer and producer surplus exceed the increased government spending necessary to finance the subsidy?
(10 marks) The market demand and supply functions for milk are: QD = 14 − 2P...
The market demand and supply functions for milk are: QD = 14 − 2P and QS = − 1+P. If a price floor of $6 is implemented, calculate the change in producer surplus. How many surplus units of milk are being produced? If the government purchases all the excess units at $6, calculate the milk expenditures by government?
Suppose there is a market at its competitive equilibrium. Demand p = 100 - QD Supply...
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...
Consider the market for butter in Saudi Arabia. The demand and supply relations are given as...
Consider the market for butter in Saudi Arabia. The demand and supply relations are given as follows: Demand:             QD = 12 - 2P Supply:                Qs = 3P - 3. P is the price of butter. Calculate: Equilibrium price _____________                   2. Equilibrium quantity _____________ Consumer surplus ___________                       4. Producer surplus ___________ Draw the demand and supply graphs. Show the equilibrium price and quantity, consumer surplus and producer surplus in the graph below. Graphs must be on scale. Suppose government imposes...
The demand and supply functions of a given competitive market are provided as follows: Qd =...
The demand and supply functions of a given competitive market are provided as follows: Qd = 100 – 2P Qs = 70 + 3P You are required to; (a) Find the equilibrium price and quantity sold. 7 marks (b) Assuming that the government of Ghana has imposed GH¢2.00 per unit tax on the good in the market. What will be the new equilibrium price and quantity in the market? 11 marks
Suppose the market for soda is represented by the following supply and demand equations: QS =...
Suppose the market for soda is represented by the following supply and demand equations: QS = 35P – 39.75 and QD = 10.25 – 5P, where P is price per bottle and Q measures bottles per second. a. What are the value of consumer and producer surplus? b. If the government imposes a $0.50 tax per bottle, what are the value of consumer and producer surplus? c. What is the deadweight loss from the tax? How much revenue does the...
The demand and supply functions for rental accommodation in New York are as follows: Qd =...
The demand and supply functions for rental accommodation in New York are as follows: Qd = 120 - P Qs = 2P a. Solve for the competitive equilibrium rental rate (P) and quantity (Q) of rental units in New York. Illustrate this equilibrium in a graph. b. On your graph, show the regions that represent consumer surplus and producer surplus. Calculate the value of consumer surplus, producer surplus, and overall welfare. c. Suppose the City of New York enacts a...
25) Recall the demand and supply equations: QD=20 - 2P and QS=3P. (a) Suppose a $5...
25) Recall the demand and supply equations: QD=20 - 2P and QS=3P. (a) Suppose a $5 tax, T=5, has been levied on consumers: (i) Compute the new demand curve (ii) Draw the new demand curve in (a) (b) Compute the DWL of the consumer and the producer after the tax. (c) Compute the tax revenue generated by the $5 tax. (d) Compute the consumer surplus, CS1, after the $5 tax has been enforced. (e) Compute the producer surplus, PS1, after...
Suppose that the (inverse) demand for Sugar in the US is given by, P= 75-2 Qd...
Suppose that the (inverse) demand for Sugar in the US is given by, P= 75-2 Qd where P = price per bulk bag (in dollars) and Qd = quantity demanded (in millions of bulk bags). Suppose the (inverse) supply of sugar is given by, P= 3 Qs where P = price per bulk bag (in dollars) and Qs = quantity supplied (in millions of bulk bags). a.) Find the equilibrium price and quantity of sugar exchanged in the US market,...
Suppose that the Demand and Supply functions are : QD=800-4P and QS=8P-160. The government imposes a...
Suppose that the Demand and Supply functions are : QD=800-4P and QS=8P-160. The government imposes a per unit tax of $3. After the tax, the supply equation becomes: QS=8P-184. (Hint: you really should draw a graph for this question, as you did in the Extra Credit) Find Government Revenues and Deadweight Loss (DWL) AFTER the tax Select one: a. Government Revenues = 1,416; DWL = 12 b. Government Revenues = 1,416; DWL = 8 c. Government Revenues = 1,440; DWL...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT