Consider a market where supply and demand curves are given by Q = 4P and Q = 12 - 2P. Calculate the equilibrium price and quantity in this market. Now consider a government that collects a unit tax of 0.2 liras for every unit of good sold in the market from the producers. What is the new supply curve? What is the new market equilibrium quantity? What is the price that consumers pay? What is the price producers get? What is the tax incidence on consumers? producers?
Consider a market where supply and demand curves are given by Q = 4P and Q = 12 - 2P. Calculate the equilibrium price and quantity in this market. Now consider a government that collects a unit tax of 0.2 liras for every unit of good sold in the market from the producers. What is the new supply curve? What is the new market equilibrium quantity? What is the price that consumers pay? What is the price producers get? What is the tax incidence on consumers? producers?
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand And Government Policies
Section: Chapter Questions
Problem 10PA
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