The following table is to be used for answering questions 9-12. Price per dozen Dozens of doughnuts Dozens of doughnuts demanded supplied $5.00 12,000 24,000 4.25 15,000 21,000 3.50 18,000 18,000 2.75 21,000 15,000 2.00 25,000 10,000 9. What is the equilibrium price? What is the equilibrium quantity?
The following table is to be used for answering questions 9-12.
demanded supplied
$5.00 12,000 24,000
4.25 15,000 21,000
3.50 18,000 18,000
2.75 21,000 15,000
2.00 25,000 10,000
9. What is the
10. Suppose that a tax of $1.50 per dozen is levied by the government on producers.
What is the new equilibrium quantity? What is the new equilibrium price?
11. Suppose, instead, that a subsidy of $1.50 per dozen is given by the government to
producers. What is the new equilibrium quantity? What is the new equilibrium
price?
12. Suppose now instead that, instead of a subsidy, the government enters the market to
support a price of $4.25 per dozen. How many dozens of doughnuts will the
government need to buy?
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