Restaurant = Q(d) 3520-22P(d) = Q(s) -416+10P(s) Equilibrium price (before anything) is $123 1. What is the consumer surplus when this market is in equilibrium? 2. Suppose as a part to increase city revenue, the city launches a tax of 7%. What's the new Equilibrium? 3. If there is an excise tax of $16, suppliers will now sell the product for $112. What is the deadweight loss from the tax? 4. What is the government revenue of the $16 tax?
Restaurant = Q(d) 3520-22P(d) = Q(s) -416+10P(s) Equilibrium price (before anything) is $123 1. What is the consumer surplus when this market is in equilibrium? 2. Suppose as a part to increase city revenue, the city launches a tax of 7%. What's the new Equilibrium? 3. If there is an excise tax of $16, suppliers will now sell the product for $112. What is the deadweight loss from the tax? 4. What is the government revenue of the $16 tax?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Restaurant
=
Q(d) 3520-22P(d)
=
Q(s) -416+10P(s)
Equilibrium price (before anything) is $123
1. What is the consumer surplus when this market is in equilibrium?
2. Suppose as a part to increase city revenue, the city launches a tax of 7%. What's the
new Equilibrium?
3. If there is an excise tax of $16, suppliers will now sell the product for $112. What is the
deadweight loss from the tax?
4. What is the government revenue of the $16 tax?
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