The demand and supply functions for three (03) goods are given as follows:Dx = 100-3Px+Py+3PzDy = 80+Px-2Py-PzDz = 120+3Px-Py-4PzSx = -10+PxSy = -20+3PySz = -30+2Pz The equilibrium prices and quantities of all three goods are?The government decides to:a) Impose a 25% Tax on X?b) Impose a 5 Rs /unit Tax on Y?c) Give a 10% subsidy on good z?Analyze the impact of each of these policies separately on equilibrium prices and quantities?Analyze the impact of each of these policies separately on equilibrium prices and quantities?

Equilibrium is essential for achieving both a fair and productive economy. When a system is at its…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The demand and supply functions for three (03) goods are given as follows:

D_x = 100-3P_x+P_y+3P_z

D_y = 80+P_x-2P_y-P_z

D_z = 120+3P_x-P_y-4P_z

S_x = -10+P_x

S_y = -20+3P_y

S_z = -30+2P_z

The equilibrium prices and quantities of all three goods are?
The government decides to:
- a) Impose a 25% Tax on X?
- b) Impose a 5 Rs /unit Tax on Y?
- c) Give a 10% subsidy on good z?
Analyze the impact of each of these policies separately on equilibrium prices and quantities?
Analyze the impact of each of these policies separately on equilibrium prices and quantities?

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