Question

Let the market demand curve be *Q**D**=8-P*
and the market supply curve be *Q**S**=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
*P**b* and the sellers’ price
*P**S*.

Rewrite the demand and supply curves using *P**b*
and *P**S*, respectively.

Write down the equation relating *P**b* and
*P**S* with respect to the *tax=2*

Solve for the post-tax, equilibrium buyers’ price
*P**b*, seller’ price *P**S* and new
quantity *Q**'*.

Now, calculate the revenue generated from imposing the tax, and calculate the deadweight loss (DWL) from imposing the tax.

Answer #1

The demand and supply for Fuji apples are given by
QD = 17,500 - 25 P and
QS = 10 P, where P is price
per pound and Q is pounds of apples. What is the consumer
surplus and producer surplus at the equilibrium?
A.
CS = $500,000; PS = $1,250,000
B.
CS = $750,000; PS = $1,250,000
C.
CS = $500,000; PS = $750,000
D.
CS = $1,250,000; PS = $500,000
The market for plywood is characterized by the...

2Q Consider a closed economy. Let the demand curve be P = 80 - Q
and the supply curve be P = 20 + 2Q .
a) Calculate the equilibrium price and equilibrium quantity. b)
Suppose the government sets a price ceiling of $55, what is the
amount of excess demand or excess supply? (Write down excess demand
or excess supply). c) Suppose the government sets a production
quota of 16 units, calculate the equilibrium price and equilibrium
quantity. 2....

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...

Question 2. The market supply and demand curves for a product
are:
QS=0.5P (supply curve)
QD=60–2P (demand curve)
where Q is the quantity of the product and P is the market
price.
(1). Calculate the equilibrium price, equilibrium quantity and
total social welfare. (10 points)
(2). Suppose that the market has changed from a perfectly
competitive market to a monopoly market, calculate the new
price–output combination and the total deadweight loss in the
monopoly market. (10 points)

Suppose that a market is described by the following supply and
demand equations:
QS = 2P
QD = 400 - 3P
Suppose that a tax of T is placed on buyers, so the new demand
equation is
QD = 400 – 3(P+T)
Solve for the new equilibrium. What happens to the price
received by sellers, the price paid by buyers, and the quantity
sold?
Tax revenue is T x Q. Use your answer from part (b) to solve for
tax...

A market is described by the following supply and demand
curves:
QS = 2P
QD = 400 - 3P
Solve for the equilibrium price and quantity.
If the government imposes a price ceiling of $70, does a
shortage or surplus (or neither) develop? What are the price,
quantity supplied, quantity demanded, and size of the shortage or
surplus?
If the government imposes a price floor of $70, does a shortage
or surplus (or neither) develop? What are the price, quantity...

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...

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.

Suppose that a market is described by the following supply and
demand equations:
QS = 2P
QD = 400 - 3P
Solve for the equilibrium price and the equilibrium
quantity.
Suppose that a tax of T is placed on buyers, so the new demand
equation is
QD = 400 – 3(P+T)
Solve for the new equilibrium. What happens to the price
received by sellers, the price paid by buyers, and the quantity
sold?
Tax revenue is T x Q. Use...

Suppose the demand curve is given by Qd=75-5P and the supply
curve is given by Qs=P-3. SHOW YOUR WORK in the space below (type
it out, line by line), and solve for the equilibrium price, the
equilibrium quantity, the consumer surplus, the producer surplus,
and the total surplus.

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