The market for calculators is given by the following supply and demand equations (and graphed on the right) Qd=40-P ; Q=P A) What is P* and Q*? B) What is the CS, PS, and TS?

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Need help with A and B
Surplus and DWL cont.
The market for calculators is given by the
following supply and demand equations (and
graphed on the right)
Qd=40-P ; Q=¹ P
A) What is P* and Q*?
B) What is the CS, PS, and TS?
C) Suppose the government taxes $10 per
calculator. Draw the tax wedge.
D) What is P? What is P,? What is the quantity
traded, Q?
E) What is the CS, PS, tax revenue, DWL?
F) How do the answers in part C change if the
tax changes to $25?
50
45
40
35
30
25
20
15
10
5
0
0
5
10
15
20
25
Transcribed Image Text:Surplus and DWL cont. The market for calculators is given by the following supply and demand equations (and graphed on the right) Qd=40-P ; Q=¹ P A) What is P* and Q*? B) What is the CS, PS, and TS? C) Suppose the government taxes $10 per calculator. Draw the tax wedge. D) What is P? What is P,? What is the quantity traded, Q? E) What is the CS, PS, tax revenue, DWL? F) How do the answers in part C change if the tax changes to $25? 50 45 40 35 30 25 20 15 10 5 0 0 5 10 15 20 25
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