Please check to see if correct for Demand: P=1500-0.5Q Supply: P=150+0.25Q Equilibrium Price and Quantity of...
Please check to see if correct for
Demand: P=1500-0.5Q
Supply: P=150+0.25Q
Equilibrium Price and Quantity of Product:
P*=600 and Q*=1800
Price Elasticity of Demand at the Equilibrium
Price:
-0.666
There is a $30 per unit tax levied on the consumers,
what price will
buyers pay after the tax is imposed:
$630
Quantity of the good that will be sold after the tax
is imposed?
1740
Deadweight loss created by the tax:
$180
Homework Answers
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Please check to see if correct for
Demand: P=1500-0.5Q
Supply: P=150+0.25Q
Equilibrium Price and Quantity of...
Suppose the market supply and demand for guitars in San Francisco are given by Demand: P=1000-0.25Q,...
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Calculate the tax incidence i.e. share of the tax paid by
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of 200 (million of packs per day). Suppose a $2/pack tax is imposed
that causes equilibrium quantity to go down to 150 (million of
packs per day).
Calculate the tax incidence i.e. share of the tax paid by
consumers & producers
Calculate the consumer surplus before and after the tax
Calculate the deadweight loss of the tax
Calculate the tax revenue of the tax
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