Suppose the demand for a good is modeled by the equation Q = 5 - 3P,...
Suppose the demand for a good is modeled by the equation Q = 5 - 3P, and the supply for the good is modeled by Q = 2 + P. Fill in the blanks below with decimal answers (i.e. no fractions).
The equilibrium quantity of the good will be ________ and the equilibrium price will be ________.
Homework Answers
Setting QD=QS to find the equilibrium quantity and price
5-3P=2+P
5-2=4P
2=4P
Equilibrium Price=2/4 =0.5
Equilibrium Quantity=5-3(0.5) = 3.5
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Suppose the demand for a good is modeled by the equation Q = 5 -
3P,...
Fill in the blanks below with decimal numbers (not fractions): Suppose the demand for a product...
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Tax Problem:
Suppose the demand curve for a good is given by Q D = 10 - 2P and
the supply curve is given by
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a) (4 points) Find the equilibrium price and quantity in the
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b) (6 points) Now suppose the government imposes a tax of t = 3.
Find the new equilibrium price at
which the good is sold in the market and the quantity of the...
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Suppose the demand for video games is q=40-2p and the supply is q=3p, and there is a quantity tax, $5 per unit of the video game. 1. Compute the equilibrium quantity and price before the tax; 2. Compute the equilibrium quantity and prices for both buyers and sellers after the tax; 3. Compute the total tax revenue raised by the government and the fraction of tax the buyers need to paytax paid by buyers/total tax revenue). 4. Compute the dead...
Q(p) = 10 + 3p
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3. The demand and supply for wine are given by Q-20-P and Q-3P, respectively. P is the dollar price of wine per bottle, and Q is the number of bottles (unit: thousand bottles). (1) What is the equilibrium price and quantity? (2) Suppose now the government imposes a per-unit tax of $4 on the sellers. Solve for the nevw equilibrium price and quantity, the price sellers received, and the price consumers paid. (3) Calculate the government tax revenue. (4) What...
Question 3: Suppose that the demand equation: P- 10-Q and supply equation: P Q a. Calculate the equilibrium price and quantity b. Calculate the consumer surplus, producer surplus and total surplus at equilibriunm Suppose the government imposes a tax of $2 for each unit bought. Derive the new equilibrium price that consumers pay, the price that firms receive, and quantity c. d. Calculate the deadweight loss of this tax. e. In a diagram, show the equilibrium in part a and...
Tax Problem:
Suppose the demand curve for a good is given by Q D = 10 - 2P and
the supply curve is given by
Q S = -2 + P.
a) (4 points) Find the equilibrium price and quantity in the
absence of any government intervention.
b) (6 points) Now suppose the government imposes a tax of t = 3.
Find the new equilibrium price at
which the good is sold in the market and the quantity of the...
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