B The demand and supply functions for a product are: Q=50-3P and Q, =-6+4P, respectively (1) Graph each function on the same diagram. From the graph determine the equilibrium price and quantity. Confirm your answer algebraically. If the producer must pay a fixed tax of £3.5 per unit, rewrite the equation of the supply function to include tax. Graph the supply function and hence determine the equilibrium point when tax is included. What percentage of the () tax is paid by the consumer? Give an interpretation for your results.

B The demand and supply functions for a product are: Q=50-3P and Q, =-6+4P, respectively (1) Graph each function on the same diagram. From the graph determine the equilibrium price and quantity. Confirm your answer algebraically. If the producer must pay a fixed tax of £3.5 per unit, rewrite the equation of the supply function to include tax. Graph the supply function and hence determine the equilibrium point when tax is included. What percentage of the () tax is paid by the consumer? Give an interpretation for your results.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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