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9. Consider a widget market with market supply and demand curves given by QS = -10 + 2P QD = 320 - 4P

a) Calculate the equilibrium quantity and price.

b) Now suppose the government imposes a $9 tax per widget. Calculate the equilibrium quantity and price.

c) Calculate the post-tax CS, PS, and DWL.

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Nestor RutherfordLv2
13 Dec 2019
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Related questions

The widget industry is perfectly competitive. The industry demand and supply functions for widgets are given below.
Qd = 424 - 40P
Qs = 40 + 8P

a. Calculate equilibrium quantity and equilibrium price

b. If the government establishes a price floor of $9, will there be excess supply or excess demand?

c. If the government establishes a price ceiling of $6, will there be excess supply or excess demand?

d. If the supply curve is Qs = 34 + 12P, what will be the equilibrium quantity and price?

e. if the demand curve also changes to Qd = 484 - 38P, what will be the equilibrium quantity and price?

 

Consider the following market QD= 15-2P QS= 5P-2.5

a. Let the government impose a tax of 1.4 dollars per unit on the seller. Find the new equilibrium price paid by buyers PB and the effective price received by sellers PS.

b. Determine the quantity of the goods bought and sold.

c. Calculate the surpluses and the deadweight loss.

d. Calculate the tax revenue.

A market is described by the following supply-and-demand curves:

Qs=2P

Qd= 300-P

Solve for equilibrium price and quantity.

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