Q³ = 100 + 3P Qd = 400 – 2P %3D where Q® is the quantity supplied, Qd is the quantity demanded and P is price. From this information compute equilibrium price and quantity. а. b. Now suppose that a tax is placed on buyers so that Qé = 400 – (2P + T) where T is taxes. If T = 15, solve for the new equilibrium price and quantity. (Note: You are solving for the equilibrium price for sellers and buyers). c. The income elasticity of Abigail's demand for CDs is 0,75. For Abigail Cds are a normal good or an inferior good? Explain your answer.

Q³ = 100 + 3P Qd = 400 – 2P %3D where Q® is the quantity supplied, Qd is the quantity demanded and P is price. From this information compute equilibrium price and quantity. а. b. Now suppose that a tax is placed on buyers so that Qé = 400 – (2P + T) where T is taxes. If T = 15, solve for the new equilibrium price and quantity. (Note: You are solving for the equilibrium price for sellers and buyers). c. The income elasticity of Abigail's demand for CDs is 0,75. For Abigail Cds are a normal good or an inferior good? Explain your answer.

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter4: Supply And Demand: An Initial Look

Section: Chapter Questions

Problem 3TY

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