Question

kindly do it as written form on word

1 Market Equilibrium [60 marks]

Suppose the demand and supply relations of wheat in an economy are given by:

D: Q = 1500 − 6P + aY

S: Q = −270 + 9P

where Q denotes the quantity of wheat measured in million of bushels per year, P is the price of wheat measured in thousand of £ per million bushels; Y is average income measured in thousand £ per year.

1. Let a = 0. Consider the introduction of a tax. Let P denote net price. Illustrate on the same figure1 the market equilibria in three scenarios:

(a) no tax

(b) lump sum tax that equals £500 per million bushells

(c) proportional tax that is designed such that at the market equilibrium the per unit tax revenue generated equals £500 per million bushells.

Use Solver to compute the market equilibria in all three scenarios. Comment on the changes to the supply and demand curve and equilibrium quantities and prices.[35 marks]  

my student number is 100241246 it is required to compute value of Y

Answer 1

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Demand sofPli cuvve 00.00 So.oo So oo Quantt mill:on bushe b because surely cuwe3 In dr?endent incone .wheve emoT CUYve ema incame