Consider the market demand and supply for widgets: QP = 200-2P; QS = 3P-180 (1) (a) If the market is perfectly competitive, find the equilibrium price and quantity, and find the consumer and producer surplus. (b) If the market has only one producer, whose cost function is TC = 60Q+Q², find the equilibrium quantity and price, and find the consumer and producer surplus. (c) Based on (b), now suppose that the government imposes a $4 tax on per unit consumption. Find the new equilibrium price and quantity, the consumer and producer surplus, and the government revenue if the tax is imposed on the monopoly.

Consider the market demand and supply for widgets: QP = 200-2P; QS = 3P-180 (1) (a) If the market is perfectly competitive, find the equilibrium price and quantity, and find the consumer and producer surplus. (b) If the market has only one producer, whose cost function is TC = 60Q+Q², find the equilibrium quantity and price, and find the consumer and producer surplus. (c) Based on (b), now suppose that the government imposes a $4 tax on per unit consumption. Find the new equilibrium price and quantity, the consumer and producer surplus, and the government revenue if the tax is imposed on the monopoly.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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