Question

answers only E, F, G thanks
There is a coastal community north of San Francisco that has 2,000 houses (there cannot be less than 2,000 houses). At a price of $200,000 area residence would purchase 4,000 homes but if the houses were $800,000 all of the residence would move out of the community. Currently the market price of a house in this area is $500,000 and all 2,000 homes are purchased. However, if the market price increased to $700,000, builders would add 50 homes to the community. (A) What is the linear supply function? (B) What is the linear demand function? (C) Assume a 1.5% tax is collected upon property purchase. Graph supply, demand and the tax. Label all intercepts and market equilibrium price and quantity. (include in upload file only) (D) How much revenue is collected from the tax? Does the tax burden fall on home sellers or buyers? Is there a DWL?

Answer 1

Parte Given that Supply has not changed Demand has changed to : Pa 2,000, ovo + (2,000, oro CO-s, ovo) Sooooo) Id + 14 13 2,000, ovo 1,500,000 od jad - (Savo) 2 suo, ovo t ( 300 Qld) 14 300 ad = ng 15 16 1875 Øs + Supply: P Hora 17 18 At a point of Equilibrium, Supply Demand 19 1875 t 20 cm Р 4000 P 300

2,000, owo - pa 562 500 t 0.075P 1437,500 1075 1, 337, 209.3 Q - 2 209.3 Part F Asume 1.5% tax upon property purchase of the purchase price. 3 og The demand after the implementation tax in as follows: pace (1.015), Yobtu 8 20. ovo At Equilibrium point, Qel ds

Appointments (lois! 2o,ovo 1875 t B 3o นุ ธารา p = 1318,807.339 10 11 22.04.7 11 Price 12 2,5TD, TO gs DWL 13 14 1338589 1337209 1318807 A 15 Qol 16 que 27 Sunday 2000 12 Zoovo 3 Quantidy Buyers will pay 1338589

Appointments Part 6 Tax implemented on by buyers: to 1,380.15 Tax implemented on sellers: ts 18.401.961 Therefore, it is the mejarity of the clearly stated that tax burden falls sellers.