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Q2: Suppose the
p = 50 - 2q………………1
and the supply function is
p = 10 + 3q…………….2
c) Suppose the government imposes a per unit tax of $5 on producers, what would be the effect of this tax on market clearing
d) Find the consumer and producer tax burden.
e) Calculate the tax revenue that the government received.
Only solve d and e
Step by step
Solved in 6 steps
- 4. Given the following demand and supply curves, obtain the market-clearing price and graph the equilibrium quantity. Qs = 50P, +100 la = 1300 - 10PXConverse the demandA1-1. Imagine that a market for a good is characterized by the following supply and demand equations: QS = –35 + 35P QD =100 – 10P where QS and QD are quantities in units and P is the price per unit. (a) Graph the supply and demand curves with quantity on the horizontal and price on the vertical axis. Be sure to calculate the P and Q intercepts for demand and the P intercept for supply. Calculate and illustrate the equilibrium price and quantity. [Hint: Show your work.] (b) Calculate both the demand and supply elasticity around the equilibrium point. [Hint: you can use either the point method or the average arc (midpoint) method.] (c) If a regulator imposes a quantity restriction by granting quotas for 60 units of output to existing producers, what is the new price and quantity traded? Does this policy create deadweight loss (DWL) in the market? Briefly explain and identify any DWL in your diagram. (d) What is the value of a unit of quota? Illustrate in your diagram.…
- Consider the market for pork illustrated in the graph. Suppose initial demand (D') is Q = 290 – 20p and supply (S') is Q = 80 + 40p and that a $3.00 tax is charged to consumers, shifting the demand curve to D. Using the original and after-tax pork demand functions and the supply function, derive the initial equilibrium price and quantity and the after-tax equilibrium price and quantity. %24 (Enter all responses using real numbers rounded to two decimal places) The equilibrium price is initially $ per kg. P1 ey P2 D2 D1 Q2 Q, Q. Million kg of pork per year SEP 24 30 tv Help Me Solve This Text Paces HAT More Hein ear All MacBook Air 80 DII esc F10 F11 F3 F4 F5 F6 F7 F8 F9 F1 F2 @ # $ & * 1 3 4 5 6. 7 8. P P. S per kg >Q4: Consider the market (supply and demand) for Wheat.Qd = 100 - 0.6P…………1Qs = -30 + 2P……...…...2a. Find the market equilibrium price and quantity?b. Find the market equilibrium price and quantity After imposing an ad valorem tax on production by 5% of good price.c. Find the market equilibrium price and quantity if producers receive a production subsidy of 10 SR per unit produced.Hand written solutions are strictly prohibited
- answer just question d6. The long-run supply curve for a particular type of kitchen knife is a horizontal line at a price of $3 per knife. The demand curve for such a kitchen knife is Q,=50– 2P where Q, is the quantity of knives demanded (in millions per year) and P is the price per knife (in dollars). a. What is the equilibrium output of such knives? b. If a tax of $1 is imposed on each knife, what is the equilibrium output of such knives? (Assume the tax is collected by the government from the suppliers of knives.) c. After the tax is imposed, you buy such a knife for $3.75. Is this the long- run equilibrium price?6. Who should pay the tax? The following graph shows the labor market for research assistants in the fictional country of Collegia. The equilibrium wage is $10 per hour, and the equilibrium number of research assistants is 200. Suppose the government has decided to institute a $2-per-hour payroll tax on research assistants and is trying to determine whether the tax should be levied on the employer, the workers, or both (such that half the tax is collected from each side). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of labor…
- 1. The demand and supply functions of beans are respectively given as 20QB +15PB-5PR=6000 and 10QB-15PB=1200. Similarly, the demand and supply of rice are Qr+Pr-PB=250 and 3Qr-7PR=710. Pɛ and PR are prices of beans and rice. QB is demand of beans and Qr is demand of rice. Find the equilibrium price and quantity of beans and rice. Are rice and beans substitute? Explain your answer.Comsumer Surplus Study The goal of this assignment is to apply Calculus to analyze consumer and producer surplus. This activity is based off the economical principles discussed in Section 3.1 of "Principle of Economics" and Section 7 of Chapter 3 in the Business Calculus book. The table below shows how supply and demand of gasoliine vary depending on the price: Price ($/gal) Demand (million of gal.) Supply (million of gal.) 753 513 550 1.2 700 1.4 640 600 1.6 580 639 1.8 543 660 2.2 450 680 2.4 430 700 2.6 420 720 2.8 390 735 3. 367 763 Note: there is some randomization in the above data to account for price fluctuations. Make sure to check that you input the correct data in your device. Perform the following work • Assume that Supply has a quadratic relationship with the price. Find this relationship (the help buttons contain an article to compute trend-lines in Excel): S(p) = Round your answer to 3 decimal places %3D • Assume that the Demand has a quadratic relationship with the…4. U.S. agricultural farmers are excited since the government announced an increase in subsidies even though the substitutes for agricultural goods that are imported have increased in demand; therefore, please illustrate by constructing a supply and demand graph, the direction in which the curves will shift and state the new equilibrium price and quantity; for example, state whether price and quantity increased, decreased, or are indeterminate. Please explain your rationale based on the determinants of demand and supply.
