Micro Economics question please help

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Question

Micro Economics question please help

Consider the following general demand and supply functions for a given commodity.

Q_d^{= a - bp}

^Q_s^{= dp - c}

i. Find the equilibrium price and quantity [4 Marks]

ii. Suppose that a fixed tax t is imposed on the product in question, what is the new equilibrium price and quantity. [6 Marks]

iii. Express the value of t in terms of a, b, c, d, and p. [3 Marks]

iv. Use iii. Above to write the expression for government revenue. [2 Marks]

v. Suppose that instead of a fixed tax, the government decides to set a non-binding price floor equal to . How many units will be supplied and how many units will be demanded to ensure optimal quantities? [5 Marks]

economics math science micro macro

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Answer 1

Answer #1

Qs = 3p + 10; Qd = -2p + 30

source: demand and supply in relation to the basic commodities

answered by: annph

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Answer 2

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