Let Qa = 108 - 3p and Q, =p-4 be the demand curve and supply curve for Coke in a city. (a) At the market equilibrium, the sum of consumer surplus and producer surplus equals (b) If the city government imposes a per unit tax of $8 on Coke, then at the new equilibrium, the percentage tax burden on producers will be % (please enter the percentage number only, e.g., if your answer is 10%, then only enter 10 here);
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- The market demand function for corn is Q¹ = 30 - 2P. The market supply function is Q = 5P-2.5, both measured in billions of bushels per year. Suppose the government imposes a $8.10 tax per bushel. What will be the effects on aggregate surplus, consumer surplus, and producer surplus? What will be the deadweight loss created by the tax? Instructions: Round your quantities to the nearest whole number. Round prices, surpluses and deadweight losses to 2 decimal places. a. What are the initial equilibrium effects? Complete the table below. Initial equilibrium price Initial equilibrium quantity Initial equilibrium consumer surplus Initial equilibrium producer surplus After-tax equilibrium price After-tax equilibrium quantity After-tax equilibrium consumer surplus After-tax equilibrium producer surplus $ Government revenue After-tax equilibrium aggregate surplus Deadweight loss $ Initial equilibrium aggregate surplus b. What are the effects after the government imposes a $8.10 tax per bushel.…The demand (D) and supply (S) function for a commodity are P=100 - 20 and P = 10 + Q, respectively. (a) Find the equilibrium price and quantity. That is, find the price and quantity where the D and S functions intersect. (b) A new 10% tax is imposed on this commodity. Find the burden of the tax on demanders and the burden on suppliers. Also find the total taxes. [In order to insure that we all do this problem in the same way, let's assume that the tax is imposed on the supply side of the market. In addition, the burden of the tax on demanders is the difference in price demanders pay when the tax is in existence less the price they paid when there was no tax. The burden on suppliers is the difference in price suppliers received when there was no tax and the net price (after remitting tax to the government) they receive when the tax is in existence.]The market demand function for corn is Q = 30 - 2P. The market supply function is QS = 5P-2.5, both measured in billions of bushels per year. Suppose the government imposes a $8.10 tax per bushel. What will be the effects on aggregate surplus, consumer surplus, and producer surplus? What will be the deadweight loss created by the tax? Instructions: Round your quantities to the nearest whole number. Round prices, surpluses and deadweight losses to 2 decimal places. a. What are the initial equilibrium effects? Complete the table below. Initial equilibrium price Initial equilibrium quantity Initial equilibrium consumer surplus Initial equilibrium producer surplus After-tax equilibrium price After-tax equilibrium quantity After-tax equilibrium consumer surplus After-tax equilibrium producer surplus $ Government revenue After-tax equilibrium aggregate surplus Deadweight loss Before the tax Initial equilibrium aggregate surplus b. What are the effects after the government imposes a $8.10 tax…
- The supply and demand sets for a product produced by The Firm are S = {(q, p)|q = bp − a}, D = {(q,p)|q = c − dp} where a, b, c, d are positive constants. Suppose that, under new regulations associated with recovering costs associated with the global pandemic, the government wishes to raise as much money as possible by imposing an excise tax on products such as that produced by The Firm. Show that the optimum value of this excise tax is given by bc - ad 2bd T* = and derive an expression for the resulting government revenue.The demand (D) and supply (S) function for a commodity are P =100 – 2Q and P = 10 + Q, respectively. (a) Find the equilibrium price and quantity. That is, find the price and quantity where the D and S functions intersect. (b) A new 10% tax is imposed on this commodity. Find the burden of the tax on demanders and the burden on suppliers. Also find the total taxes. [In order to insure that we all do this problem in the same way, let’s assume that the tax is imposed on the supply side of the market. In addition, the burden of the tax on demanders is the difference in price demanders pay when the tax is in existence less the price they paid when there was no tax. The burden on suppliers is the difference in price suppliers received when there was no tax and the net price (after remitting tax to the government) they receive when the tax is in existence.]Market demand for Mandrake roots is given by Q=425-2P and marketsupply is given by Q=5P. The government of Sodden needs money, so it imposes a per unit tax of $5 on mandrake root. How much tax revenue do they raise with this tax?
- b) Suppose that in a certain market, the demand function for a product is given by 10p + q = 3000 and the supply function is given by 35p-q = 80 , where p is the price per unit in dollars and q is the quantity produced. If the government levies a tax of RM6 per item on the supplier, who passes the tax on to the consumer as a price increase: i. Find the equilibrium price and quantity after the tax is levied. ii. If we assume there is no tax, find the new equilibrium price and quantity.The demand (D) and supply (S) function for a commodity are P =100 – 2Q and P = 10 + Q, respectively. (a) Find the equilibrium price and quantity. That is, find the price and quantity where the D and S functions intersect. (b) A new 10% tax is imposed on this commodity. Find the burden of the tax on demanders and the burden on suppliers. Also find the total taxes.In 1996, Florida voted on (and rejected) a $0.01-per pound excise tax on refined cane sugar in the Florida Everglades Agricultural Area. Swinton and Thomas (2001) used linear supply and demand curves (based on elasticities estimated by Marks, 1993) to calculate the incidence from this tax given that the market is competitive. Their inverse demand curve was p=1.787 -0.0004641Q, and their inverse supply curve was -0.4896 + 0.00020165Q. p=- (Hint: The incidence that falls on consumers is the difference between the price with and without the tax divided by the tax.) Calculate the incidence of the tax that falls on consumers for a competitive market. The incidence that falls on consumers in a competitive market is 70.0 percent. (round your answer to one decimal place) If producers joined together to form a monopoly, and the supply curve is actually the monopoly's marginal cost curve, what is the incidence of the tax? The incidence that falls on consumers is percent. (round your answer to…
- Suppose that you are the vice president of operations of a manufacturing firm that sells an industrial lubricant in a competitive market. Further suppose that your economist gives you the following supply and demand functions: Demand: = 50 – 2P Supply: Q° = - 10 +P. What is the consumer surplus in this market? Consumer surplus is $ (Enter your response rounded to two decimal places.) What is the producer surplus? Producer surplus is $ (Enter your response rounded to two decimal places.)A rice producing company faces the following demand function: Pd = 300 – 0.10Q. The firm’s accountant believes that the supply function of the company is given as: Ps = 100 + 0.10Q where P denotes price of a kilogram of rice GH¢ and Qd and Qs are the quantities demanded and supplied respectively. Based on this information: If the government now decides to impose a per unit tax of GH¢ 15 per unit on the quantity supplied and the company adjusts the supply function appropriately to include tax: Determine the new equilibrium price and quantity in the market for the company. Who pays a larger portion of the tax revenue? What is the total tax revenue to government? Calculate the deadweight loss to society. What type of elasticity of demand exists in the market? What type of elasticity of supply exists in the market after the tax imposition? Present graphically the results of the above questions. Given the type of price elasticity of demand in the market, what should the producer do to…The demand and supply curves for a price taking firm are as follows: Qd = 10- 0.5 Pd Qs= -2+Ps, when Ps>=2 Qs= 0, when Ps<2 where Qd is the quantity demanded when the price consumers pay is Pd, and Qs is the quantity supplied when the price producers receive is Ps. Answer the questions below: Suppose the government imposes an excise tax of 3 TL per unit. What will the new equilibrium quantity be? What price will buyers pay? What price will sellers receive? Calculate consumer surplus (CS), producer surplus (PS) and deadweight (DWL) loss in this case. (Use a diagram while answering the question, show CS, PS and DWL loss areas in your diagram.