The demand and supply curves are given by q=130−3p and q=2p−60, respectively; the equilibrium price is $38 and the equilibrium quantity is 16 units. A sales tax of 2% is imposed on the consumer. (a) Find the equation of the new demand and supply curves. b) Find the new equilibrium price and quantity. (c) How much is paid in taxes on each unit? How much of this is paid by the consumer and how much by the producer? (d) How much tax does the government collect?
The demand and supply curves are given by q=130−3p and q=2p−60, respectively; the equilibrium price is $38 and the equilibrium quantity is 16 units. A sales tax of 2% is imposed on the consumer.
(a) Since tax is imposed on consumers, demand function changes to q = 130 – 3(p + 2%*p) or
q = 130 – 3.06p and supply function remains unchanged at q = 2p – 60.
b) The new equilibrium price and quantity are determined by
130 – 3.06p = 2p – 60
p = 37.55
Price received by sellers = 37.55
Price paid by consumers = 37.55*1.02 = 38.30
Quantity = 2*37.55 – 60 = 15.10 units
(c) A total of 0.75 is paid in taxes on each unit. Of this, 0.30 is paid by the consumer and 0.45 is paid by producers.
(d) Government collects 0.75 as tax per unit and a total of 11.325
The demand and supply curves are given by q=130−3p and q=2p−60, respectively; the equilibrium price is...
The demand and supply curves for a product are given in terms of price, p, by q = 2600 - 20p and q = 10p - 400 A. Find the equilibrium price and quantity. B. A specific tax of $12 per unit is imposed on suppliers. Find the new equilibrium price and quantity. The new equilibrium price (including tax) is $______ and the new equilibrium quantity is ______ units. C. How much of the $12 tax is paid by consumers...
The demand and supply curves for a product are given in terms of price, by 9-4100-40 p and q = 10p-400 (a) Find the equilibrium price and quantity. The equilibrium price is and the equilibrium quantity is (b) A specific tax of Iper unit is imposed on suppliers. Find the new equilibrium price and quantity The new equilibrium price (including tax) is * and the new equilibrium quantity is rniixi (c) How much of the $15 tax is paid by...
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...
5. Consider a market supply and demand represented by the following: Q. = 3P - 60 and la = 800 - 7P. Use this information to answer the following questions. SXZ a. Calculate equilibrium price and quantity. b. What is the consumer surplus? c. If the government imposes an excise tax of $3, what would be the new equilibrium price, quantity? d. What would happen to the consumer surplus?
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...
In this activity consider the following demand and supply functions. emand upply D(p) 43660- 230p S(p)- 400p- 8000 ulmé that no taxes are imp 1. First, ass hen find the equilibrium price and quantity 100-230 р: 2. Assume that there is a 10% tax imposed on the consumer, find the new equilibrium price and quantit e 300 3360pa Ruu 3 (p the portion of the tax paid by the producer and the portion of the tax paid by the consumer,...
·て 2. (13 points) Consider the following demand and supply functions: Qd=20-2p and Q-4t2P a. Find the equilibrium price and quantity. Show your work. (2) b. Find consumer and producer surplus at the equilibrium. Show your work. (4) c. If a tax of $1 is imposed on the seller, what will be the new equilibrium prices (for buyer an seller) and the quantity? Show your work. (5) Find the DWL created by the tax. Show your work. (2) d.
Consider the following equations: SUPPLY: Q=10+2P DEMAND: Q=60-3P d) The government imposes a tax of 2 dollars per unit produced to the suppliers. Compute the new equation and graph.
4. Market demand is given as QD-210-3P. Market supply is given as QS competitive equilibrium, what will be the value of consumer surplus? a. $1400 2P+50. In a perfectly b. $2166 .$3267 d. $6538 5. Orange juice and apple juice are substitutes. Suppose bad weather sharply reduced the orange harvest. What would the impact be? a increase consumer surplus in the market for orange juice but decrease producer surplus in the market for apple juice b. increase consumer surplus in...
The market demand and supply is described by the following equations QD = 250 - 2P QS 3P 1) Find the market equilibrium. 2) What is the CS, PS, and W in this market? 3) Assume that the government introduces a equilibrium? price ceiling of p = 15. What is the new 4) Find the change in CS, PS, and W. Is there Dead Weight Loss? if so, of how much? 5) What does this tell you about the welfare...