Question

Consider the following market. Demand is given by qd = 150 – 2P, where qd is the quantity demanded and P is the price. Supply is given by qs = P, where qs is the quantity supplied.The government implements a tax of $30 per unit to be paid by consumers. What is the new market equilibrium? What is the economic incidence of the tax (that is, who pays for the tax)? How would your answer change if the government implemented a production tax of $30 per unit instead?

Answer #1

1. Consider a demand curve of the form QD = 40 - 2P, where QD is
the quantity demanded and P is the price of the good. The supply
curve takes the form of QS = -4 + 2P, where QS is the quantity
supplied, and P is the price of the good. Be sure to put P on the
vertical axis and Q on the horizontal axis. a. What is the
equilibrium price and quantity? Draw out the supply...

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...

Part A. Consider the market for apples where the market demand
is given by QD = 30 − 2p and market supply is given by QS = P Find
the market equilibrium. What will be the quantity traded if an
excise tax of $2/unit is imposed? Calculate the deadweight loss of
the excise tax.
Part B. Consider the same market from question #1. Consider that
you are the only seller in that market and you produce apple for a
marginal...

2. Demand and supply in a market are expressed as follows: 2P +
QD = 20 P - QS = 1. Suppose now that the government decides to
introduce a tax per unit sold in the amount t = $3.
a) Determine the new equilibrium quantity in the market, the
prices paid by consumers and received by sellers, as well as the
government's revenues.
b) Represent the changes occurring in equilibrium on a graph.
Identify on that graph the deadweight...

The demand for okra is given by: QD= 150 -P. The supply of okra
is given by: QS= 2P. The government has implemented a price floor
of $137. Calculate producer surplus with the price floor.

Consider a competitive market for a good where the demand curve
is determined by:
the demand function: P = 5+-1*Qd and the supply curve is
determined by the supply function: P = 0.5*Qs.
Where P stands for Price, QD is quantity demanded and QS is
quantity supplied.
What is the quantity demanded of the good when the price level
is P = $4? Additionally assume a market intervention of the form of
per unit $2 tax on the consumption of...

The demand and supply for a good are respectively QD = 16 – 2P +
2I and QS = 2P – 4 with QD denoting the quantity demanded, QS the
quantity supplied, and P the price for the good. Suppose the
consumers’ income is I = 2. 6) Determine the price-elasticity of
demand if P = 2. 7) Determine the income-elasticity of demand if P
= 2. 8) Determine the price-elasticity of supply if P = 4. 9)
Determine consumers’...

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

1. The market demand and supply was given as follow: Qd = 10 –
2P Qs = -5 + 3P
a) Compute for the Price equilibrium
b) Compute for the Quantity equilibrium
c) Plot/graph the following equation.
2. Given the equation, find the equilibrium price and quantity
of the following market and plot the equation. 13P – Qs = 27 Qd +
4P – 24 = 0

3. Market demand for a good is given by QD= 30- 2P and its
market supply is given by QS=P - 6.
(a) Determine the market equilibrium quantity (QM) and price
(PM) .
(b) If marginal external benefit is 3 at all levels of
consumption (i.e. MEB=3), then what is the socially efficient level
of production (Q*)?
-Provides some work to justiy your answers.

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