Demand for a product is described by the price-quantity curve p = 225 0.2g and supply is described by the by the price-quantity curve p = 45 +0.2q. How much should the government apply a tax per item to the supply so as to maximize tax revenue?

Demand for a product is described by the price-quantity curve p = 225 0.2g and supply is described by the by the price-quantity curve p = 45 +0.2q. How much should the government apply a tax per item to the supply so as to maximize tax revenue?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 30CTQ: In a market where the supply curve is perfectly inelastic how does an excise tax affect the price...

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Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

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Demand for a product is described by the price-quantity curve p = 225 - 0.2q and supply is described
by the by the price-quantity curve p = 45 +0.2q. How much should the government apply a tax per
item to the supply so as to maximize tax revenue?

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