Suppose that there is a market demand and market supply curve given by P = 10 - 0.1Q and a market supply curve given by P = 2 + 0.001Q. a. What is the market equilibrium. b. What is the market equilibrium with a unit excise of $1 per unit. c. What ad valorem rate of tax raises the same revenue as the unit tax of $1
Suppose that there is a market demand and market supply curve given by P = 10 - 0.1Q and a market supply curve given by P = 2 + 0.001Q. a. What is the market equilibrium. b. What is the market equilibrium with a unit excise of $1 per unit. c. What ad valorem rate of tax raises the same revenue as the unit tax of $1
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
Chapter17: Taxation And Resource Allocation
Section: Chapter Questions
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Suppose that there is a market demand and market supply curve given by P = 10 - 0.1Q and a market supply curve given by P = 2 + 0.001Q.
a. What is the
b. What is the market equilibrium with a unit excise of $1 per unit.
c. What ad valorem rate of tax raises the same revenue as the unit tax of $1
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