The weekly demand for wine in the United States is described by the following equation: Qd = 45,000,000 - 1,500,000P where Qd is the weekly quatity demanded in bottles and P is the price per bottle in dollars. The weekly supply of wine in the United States is described by the following equation: Qs = -5,000,000 + 1,000,000P where Qs is the weekly quantity supplied in bottles and P is the price per bottle in dollars. a. What is the equilibrium price and quantity for wine in the US? Intense lobbying efforts result in the United States government establishing a $5 per bottle excise tax by wine producers. b. What would be the new equilibirum price and quantity after the imposition of the per bottle excise tax? c. Determine the total amount of the consumer surplus assuming the market for wine is in equilibrium after the imposition of the excise tax.
The weekly demand for wine in the United States is described by the following equation:
Qd = 45,000,000 - 1,500,000P
where Qd is the weekly quatity demanded in bottles and P is the price per bottle in dollars. The weekly supply of wine in the United States is described by the following equation:
Qs = -5,000,000 + 1,000,000P
where Qs is the weekly quantity supplied in bottles and P is the price per bottle in dollars.
a. What is the
Intense lobbying efforts result in the United States government establishing a $5 per bottle excise tax by wine producers.
b. What would be the new equilibirum price and quantity after the imposition of the per bottle excise tax?
c. Determine the total amount of the
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 6 images
