Question

Consider the following market. Demand is given by qd = 150 – 2P, where qd is...

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?

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. Consider a demand curve of the form QD = 40 - 2P, where QD is...
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 =...
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 =...
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...
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...
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...
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...
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 =...
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...
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...
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.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT