Consider the following market for CFC-11, a known ozone-depleting substance: Demand: Q=15-1.5P Supply: Q=5+ 0.5P where P is price per pound. Assume the governmental authority imposes a $5 per pound excise tax on CFC-11, which shifts the supply function to Q' = 2.5+ 0.5P. Use this information for any or all of the next three questions below. a) What is the equilibrium price and quantity of CFC-11 before the excise tax?

Consider the following market for CFC-11, a known ozone-depleting substance: Demand: Q=15-1.5P Supply: Q=5+ 0.5P where P is price per pound. Assume the governmental authority imposes a $5 per pound excise tax on CFC-11, which shifts the supply function to Q' = 2.5+ 0.5P. Use this information for any or all of the next three questions below. a) What is the equilibrium price and quantity of CFC-11 before the excise tax?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Price 22 20 12 10 P = $0.8 Compute the price of suppliers that they are willing to receive for the quantity demanded at the new post- policy price of $20 per bushel (hint: plug the quantity demanded at the new post-policy price of $20 per bushel you found in previous question into the supply function for Qs and figure out the price). P = $11.0 P= $10.4 So P = $12.4 Do 8.8 Quantity
Provide a graphical representation of a negative supply-side externality that identifies the market failurein terms of both price and quantity.
Suppose that the demand and supply functions for good x are given as follows: Q = 240-2P, +1-P, and Q - -30+ P-21 +8-25 where P, denotes the price of good x. P, denotes the price of a related product y, I denotes income, t denotes tax firms face, s denotes subsidy and f denotes factor prices What is the equilibrium quantity of x as a function of exogenous variables P, .I. t. s and f eqb Qeqb Qeq = 60 + = 90 + = 1+Py-4t+2s-4f 3 90+ 1-Py-4t+2s-4f 3 eqb Qx = 60 + 1-Py-4t+2s-4f 3 1+Py+4t+2s-4/ 3
The market for smart phone applications is characterized by the following demand and supply curves. QD = D(P) = 15 - 3P QS = S(P) = 5 + 10P (a) Calculate the equilibrium price and quantity for this market. (b) The government is considering introducing a per unit subsidy of t on each electric car that is purchased. Suppose that the statutory incidence of this subsidy will be on buyers. Using the equilibrium conditions, D(Pn - t) = S(Pn) = Q* (i.e. that demand equals supply in equilibrium), derive an equation in terms of es and ed that describes what fraction of the subsidy is borne by buyers/consumers. (c) Suppose that the unit tax is set at t = 0.1 per unit. What is the excess burden of this tax per dollar of revenue raised? (d) Suppose that we incorrectly assumed that supply was perfectly elastic and there was no impact of the tax on the equilibrium price received by sellers. Would EB/Tax Revenue be higher or lower than what you calculated in part (c)? In 4 sentences, explain your…
When considering the possibility of legalizing the recreational use of cannabis, had the state governments of California and Maine already anticipated the price decline for cannabis after legalization? If yes, should the state governments of California and Maine choose the tax-per-price scheme or the tax-per-weight scheme?
Consider a situation where Ron (R) and Nancy (N) have demands for a private good that can be represented by the following functions: D_R: Q_R = 18 - 3P_R D_N: Q_N = 11 - 2P_N If Ron and Nancy are the only two consumers of this private good and the supply function for the good is: S: Q = -1 + P What is the aggregate quantity of the good they buy?
Given a demand curve of P=214-7Qd and supply of P=438Qs, find the total cost to society of a lump sum tax of 17 dollars, assuming the government is as efficient in resouce use as households.
Demand: Qd= 2,600 - 5P Supply: Qs= 1000 + 10P What would be the amount of shortage if a price ceiling is imposed at $180?