What is the demand elasticity at the equilibrium of 2022? What is the supply elasticity? Which one is more elastic? High gas prices have imposed a great burden on consumers. Suppose that the government now wishes to protect consumers by taxing gasoline supply and considers to impose a $0.5 tax per gallon on gas suppliers. What is the equilibrium price and quantity after tax? Calculate the burden of this proposed tax; what percent of the tax would be “paid" by consumers (Round to nearest percent)? How is this related to your answer in part c)?
Assuming a supply function of
Qs = 100+100p
and a
Qd = 700-50p
and an
please answer the following
![What is the demand elasticity at the equilibrium of 2022? What is the supply
elasticity? Which one is more elastic?
High gas prices have imposed a great burden on consumers. Suppose that the
government now wishes to protect consumers by taxing gasoline supply and
considers to impose a $0.5 tax per gallon on gas suppliers. What is the equilibrium
price and quantity after tax?
Calculate the burden of this proposed tax; what percent of the tax would be "paid"
by consumers (Round to nearest percent)? How is this related to your answer in
part c)?
What is the amount of deadweight loss created by this policy? Is this policy a good
idea?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F744fe171-0ada-48b3-afc1-db9ba17f0b5f%2Fbcd9df93-64de-4859-b8ff-eff00bd51afc%2F2dwnt2r_processed.png&w=3840&q=75)
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Given
Supply equation of gasoline: ...... (1)
Demand equation of gasoline: ...... (2)
Here p is the price per gallon and Q is quantity in millions of gallons.
The equilibrium price is $4 per gallon and the equilibrium quantity is 500 million gallons
Price elasticity of demand:
Supply elasticity of demand:
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