Question

Please answer this ASAP: Consider the energy market where supply is described by P = 25+5Q and demand is described by P=250-10Q. If the market is perfectly competitive and in equilibrium: Consider this as a perfectly competitive market . If a tax of $40 per unit was placed on the market, which of the statements are true?

The consumer would pay $26.67 of the tax and the consumer would pay $13.33 of the tax.

The consumer would pay more of the tax because demand is relatively more inelastic than supply.

Under the new price the consumer pays and that the producer receives, the quantity traded in the market would be 12.33 units.

All three of the above statements are true.

Two of the statements are true.

Answer 1

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