Use the following information to answer the question: Qs = 4/5 P Qd = 20 - 4/5 P What is the size of consumer surplus if a $2 tax is imposed on each item sold? $72.90 15 items. 90 items. $52.90 $3
When the tax of $2 is imposed on sales, supply curve shifts left and this raises the price consumers pay and reduces the quantity sold
Qs = Qd
(4/5)(P + 2) = 20 - (4/5)P
(4/5)P + (4/5)P + 8/5 = 20
1.6P = 18.4
Price that sellers receive = 11.5
Price that buyers pay = 11.5 + 2 = 13.5
Quantity = 20 - (4/5)*13.5 = 9.2 units
Max price is when Q = 0 so we have P = 20/0.8 = 25
Consumer surplus = 0.5*(max price - current price)*quantity
= 0.5*(25 - 13.5)*9.2
= $52.90
Correct choice is $52.90
Use the following information to answer the question: Qs = 4/5 P Qd = 20 -...
Use the following information to answer the question: Qs = 4/5 P Qd = 20 - 4/5 P What is the size of deadweight loss created by a $2 tax imposed on each item sold? $3.60 1.6 items $1.80 0.8 items $0.80
Use the following information to answer the question: Qs = 4/5 P Qd = 20 - 4/5 P How many items will be bought and sold if a $2 tax is imposed on each item sold? 1.2 10.8 2.4 9.2 13.2
Use the following information to answer the question: Qs = 4/5 P Qd = 20 - 4/5 P What is the amount of tax revenue if a $2 tax is imposed on each item sold? $32.40 $3 $18.4 $36 $13.50
Use the following information to answer the question: Qs = 4/5 P Qd = 20 - 4/5 P What price will producers receive if a $2 tax is imposed on each item sold? $7 $8.50 $11.50 $10 $3
Given the following information: Demand: Qd = 200 – 5P Supply: Qs = 5P If a quantity tax of $2 per unit sold is imposed, Calculate: (ii) Seller's price after tax Question 6e Given the following information: Demand: Qd = 200 – 5P Supply: Qs = 5P If a quantity tax of $2 per unit sold is imposed, Calculate: (e) Quantity after tax Question 6f Given the following information: Demand: Qd = 200 – 5P Supply: Qs = 5P If...
Deadweight Loss Given the following information: Qs = 2P P = Qs/2 QD= 180 - 4P P = (QD -180)/-4 AR = P = 45-.25Q TR = 45 - .25Q2 Hint: MC – supply curve MR = 45 - 5Q Qs = supply Qd = demand Using the above information, Graph and calculate the price-output solution under competitive market assumptions. How much is the consumer surplus producer surplus and total surplus? Calculate the price and the...
Question 6A Given the following information: Demand: Qd = 200 – 5P Supply: Qs = 5P If a quantity tax of $2 per unit sold is imposed, (a) Considering that the government will earn revenue, overall, do you think that society benefits from such a move Yes or no and why? Explain also effect on Buyer Price? Effect on Seller Price? Effects on Quantity traded? Question 6b Given the following information: Demand: Qd = 200 – 5P Supply: Qs =...
Question 6A Given the following information: Demand: Qd = 200 – 5P Supply: Qs = 5P If a quantity tax of $2 per unit sold is imposed, (a) Considering that the government will earn revenue, overall, do you think that society benefits from such a move? Explain. Yes or No? Buyer Price? Seller Price? Quantity traded? Question 6b Given the following information: Demand: Qd = 200 – 5P Supply: Qs = 5P If a quantity tax of $2 per unit...
Problem 1 Deadweight Loss Given the following information: Qs = 2P P = Qs/2 QD= 180 - 4P P = (QD -180)/-4 AR = P = 45-.25Q TR = 45 - .25Q2 MR = 45 - .5Q Hint: MC – supply curve MR = 45 - 5Q Qs = supply Qd = demand A) Using the above information, 1) Graph and calculate the price-output solution under competitive market assumptions. 2) How much is the consumer surplus producer surplus and...
Que.1 Given the following information: Demand: Qd = 200 – 5P Supply: Qs = 5P If a quantity tax of $2 per unit sold is imposed, (a) Considering that the government will earn revenue, overall, do you think that society benefits from such a move? Explain. choose one from each. a)yes or no > remain unchanged >decrease >yes >Increase >no b) Buyer Price >Remain unchanged >decrease >Yes >Increase >no c) Seller Price >remain unchanged >Decrease >Yes >Increase >No d)Quantity Traded...