The function of demand and supply of goods P = 14 - 2Q and P = 5 + 2Q. When against goods are taxed at t = 2 per unit, then calculate: b. Tax burden borne by consumers and producers.
The function of demand and supply of goods P = 14 - 2Q and P = 5 + 2Q. When against goods are taxed at t = 2 per unit, then calculate: b. Tax burden borne by consumers and producers.
Algebra: Structure And Method, Book 1
(REV)00th Edition
ISBN:9780395977224
Author:Richard G. Brown, Mary P. Dolciani, Robert H. Sorgenfrey, William L. Cole
Publisher:Richard G. Brown, Mary P. Dolciani, Robert H. Sorgenfrey, William L. Cole
Chapter8: Introduction To Functions
Section8.10: Inverse Variation
Problem 3ST
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Question
The function of demand and supply of goods
P = 14 - 2Q and P = 5 + 2Q. When against
goods are taxed at t = 2 per unit, then calculate:
b. Tax burden borne by consumers and producers.
Expert Solution
Step 1
The function of demand and supply of goods,
P = 14 - 2 Q
P = 5 + 2Q
By adding these two eqautions we get,
2P=19 i.e. P = 9.5
Therefore we get
2Q = P-5 =9.5-5 = 4.5 i.e. Q = 2.25
Therefore the equillibrium is obtained at (Q,P)=( 2.25, 9.5 )
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