The demand for gasoline is P= 4-0.002Q and the supply is P= 0.4 + 0.004Q, where Pis in dollars and Qis in gallons. Instructions: Round your answer to the nearest penny (2 decimal places). If a tax of $0.8/gallon is placed on petrol, what is the incidence of the tax? Tax incidence to the consumer: $ Tax incidence to the supplier:

The demand for gasoline is P= 4-0.002Q and the supply is P= 0.4 + 0.004Q, where Pis in dollars and Qis in gallons. Instructions: Round your answer to the nearest penny (2 decimal places). If a tax of $0.8/gallon is placed on petrol, what is the incidence of the tax? Tax incidence to the consumer: $ Tax incidence to the supplier:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The demand for gasoline is P= 4 – 0.002Q and the supply is P= 0.4 + 0.004Q,
where Pis in dollars and Qis in gallons.
Instructions: Round your answer to the nearest penny (2 decimal places).
If a tax of $0.8/gallon is placed on petrol, what is the incidence of the tax?
Tax incidence to the consumer: $
Tax incidence to the supplier: $
Instructions: Round your answers to the nearest whole number.
What is the lost consumer surplus?
$1
What is the lost producer surplus?
24

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