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Question 1 (Tax question) The demand and supply for bicycles is given by: Demand Qd 2000 - 20P = Supply Q = 4P - 40 The inverses of both are given as: Inverse Demand: Inverse Supply: P = 100 0.05Q P=0.25Q+10 The government imposes a per unit tax of Tax = $12. What is new CS and PS? What is the change in consumer and producer surplus compared to equilibrium? What is the Deadweight Loss? What is government revenue? Graph your results.

Question 1 (Tax question) The demand and supply for bicycles is given by: Demand Qd 2000 - 20P = Supply Q = 4P - 40 The inverses of both are given as: Inverse Demand: Inverse Supply: P = 100 0.05Q P=0.25Q+10 The government imposes a per unit tax of Tax = $12. What is new CS and PS? What is the change in consumer and producer surplus compared to equilibrium? What is the Deadweight Loss? What is government revenue? Graph your results.

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Question 1 (Tax question) The demand and supply for bicycles is given by: Demand Qd 2000 - 20P = Supply Q = 4P - 40 The inverses of both are given as: Inverse Demand: Inverse Supply: P = 100 0.05Q P=0.25Q+10 The government imposes a per unit tax of Tax = $12. What is new CS and PS? What is the change in consumer and producer surplus compared to equilibrium? What is the Deadweight Loss? What is government revenue? Graph your results.
Transcribed Image Text:Question 1 (Tax question) The demand and supply for bicycles is given by: Demand Qd 2000 - 20P = Supply Q = 4P - 40 The inverses of both are given as: Inverse Demand: Inverse Supply: P = 100 0.05Q P=0.25Q+10 The government imposes a per unit tax of Tax = $12. What is new CS and PS? What is the change in consumer and producer surplus compared to equilibrium? What is the Deadweight Loss? What is government revenue? Graph your results.
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