Suppose the demand for pickles on The Citadel is Qd=500-4P, and the supply is Qs=6P. Assume this market is perfectly competitive.a. On the back of the page, graph the supply and demand curves.b. Solve for the equilibrium price and quantity of tents. Show this point on your graph from part (a). c. How much consumer surplus is created in this market? How much producer surplus? d. Suppose the Council puts a tax of $5 per unit on the purchase of pickles. Write an equation showing the relationship between the price paid by consumers and the price received by producers. e. Find the new (after-tax) equilibrium quantity of pickles, price paid by consumers, and price received by producers. f. How much consumer surplus is created by this market after the tax? How much producer surplus?g. How much tax revenue is generated by this tax? How much deadweight loss does the tax cause?
Suppose the demand for pickles on The Citadel is Qd=500-4P, and the supply is Qs=6P. Assume this market is
a. On the back of the page, graph the
b. Solve for the
c. How much
d. Suppose the Council puts a tax of $5 per unit on the purchase of pickles. Write an equation showing the relationship between the price paid by consumers and the price received by producers.
e. Find the new (after-tax)
f. How much consumer surplus is created by this market after the tax? How much producer surplus?
g. How much tax revenue is generated by this tax? How much
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