7. Suppose demand and supply are given by: (LO3, L04) Q² = 14 - 1P₁ and Q = P₁ - 1 - a. Determine the equilibrium price and quantity. Show the equilibrium graphically. b. Suppose a $12 excise tax is imposed on the good. Determine the new equilibrium price and quantity. does the government earn with the $12 tax?

7. Suppose demand and supply are given by: (LO3, L04) Q² = 14 - 1P₁ and Q = P₁ - 1 - a. Determine the equilibrium price and quantity. Show the equilibrium graphically. b. Suppose a $12 excise tax is imposed on the good. Determine the new equilibrium price and quantity. does the government earn with the $12 tax?

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...

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Q18
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