Question 2 - 2P and Qs = Suppose the market demand and supply equations for flowers are Qp = 100 3P, respectively. a) Draw the demand and supply curves on a graph. Label clearly and mark the equilibrium price. b) Government imposes a £5 specific tax on sellers, what price will consumers pay? Show on the graph. c) How much tax revenue is collected by the government? Show on the graph. d) What fraction of the tax is paid by sellers?

Question 2 - 2P and Qs = Suppose the market demand and supply equations for flowers are Qp = 100 3P, respectively. a) Draw the demand and supply curves on a graph. Label clearly and mark the equilibrium price. b) Government imposes a £5 specific tax on sellers, what price will consumers pay? Show on the graph. c) How much tax revenue is collected by the government? Show on the graph. d) What fraction of the tax is paid by sellers?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section5.A: Appendix: Price Elasticity And Tax Incidence

Problem 2AQ

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