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Economics
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22 Jan 2018

Suppose that demand is given by the equation:

Qd=180-3P

But a tax of $4 is placed on producers, altering supply to the equation:

Qs= P-T-20=P-24

1) What would be the equilibrium price?

2) what is the equilibrium quantity?

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24 Jan 2018
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Taxation Question (SHOW ALL WORK)

Suppose that the demand curve (hundreds) for apples is given by Qd = 140 - 5P, where Qd is the number of pounds demanded per year and p is the price per pound. The supply of apples can be described by Qs = 40 + 5P, where Qs is the number of pounds provided.

What is the equilibrium price? (Hint: At the equilibrium, quantity demanded and quantity supplied are equal, Qd = Qs.)

What is the equilibrium quantity supplied and demanded?

Calculate the consumer surplus at the equilibrium price.

Calculate the producer surplus at the equilibrium price.

Calculate the total surplus at the equilibrium price.

Now suppose that the government imposes a tax of $8 per each pound sold, paid by the producers. In this case, what are the price and the consumer surplus?

Assume that demand for a commodity is represented by the equation P=18-2Qd and supply is represented by the equation P=-2+2Qs.

Where Qd and Qs are quantity demanded and quantity supplied, respectively, and P is the price.

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B. Now determine equilibrium quantity.

The market demand for gadgets is given by Qd=100-3p, where Qd is the quantity of gadgets demanded and p is the price of a gadget in dollars. The market supply is given byQs= p, where Qs is the quantity of gadgets supplied. The production of gadgets releases a toxic effluent into the water supply. The marginal external cost can be described by MEC(Q)= 2Q.

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