The demand and supply curves for a product are given by q=1500-10p and q=40p-1200, respectively, where p is the price and q is the quantity of the product. (a) Find the equilibrium price and quantity. p=54 q=960 (b) A sales tax of 6% is imposed on consumers. Find the new equilibrium price and quantity. p=? q=? (c) How much tax is paid on each unit? Tax per unit: $? (d)At the new equilibrium price and quantity, how much of the tax is paid by consumers, and how much by producers? (e) What is the total tax revenue received by the government?
The demand and supply curves for a product are given by q=1500-10p and q=40p-1200, respectively, where p is the price and q is the quantity of the product. (a) Find the equilibrium price and quantity. p=54 q=960 (b) A sales tax of 6% is imposed on consumers. Find the new equilibrium price and quantity. p=? q=? (c) How much tax is paid on each unit? Tax per unit: $? (d)At the new equilibrium price and quantity, how much of the tax is paid by consumers, and how much by producers? (e) What is the total tax revenue received by the government?
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
Chapter16: Externalities, The Environment, And Natural Resources
Section: Chapter Questions
Problem 4DQ
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