The demand and supply for a market are given by QD=25-P and QS = 3P. If a tax of $3/unit on output is imposed, what is the impact on the market price and consumer surplus?
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- Demand: D(p) = 2110- 7p Supply: S(p) = 23p - 500 a) First, assume that no caxes are imposed. Find the equilibrium price and quantity. Price= $ Quantity = 9. b) Now assume a specific tax of $8 per unit is imposed on suppliers. Find the new equilibrium price and quantity. Price = $ Quantity = 8. c) What portion of the tax is paid by the consumer and what portion of the tax is paid by the producer? Consumer pays $ esc Producer pays $ 9. d) How much tax revenue is generated for the government? Tax revenue = $ ! 7 :9 4 FI 2 9,262 F2 # 3 20 F3 DOD $ 4 F4 % 5 FS MacBook Pro *** A 6 e tv A F6 ◄◄ & 7 F7 ► 11 * O FB F9 Instructions ^ F10 FI OThe inverse demand for table salt is p = 200qd+1 , while the inverse supply of table salt is p = 10+ 2qs. a. Find the equilibrium price of table salt before AND after the imposition of a 40% ad valorem tax on the consumers of table salt. b. Describe the distribution of the burden (incidence) of this ad valorem tax between consumers and producers. c. Find and interpret the price elasticity of supply (es) at the after-tax equilibrium price and quantity.Consider an ad-valorem tax on a good X. The Demand for good X is constant elasticity with elasticity -2. The Supply for good Y is constant elasticity with elasticity 3. Consider the same setting as for the previous question. When a tax of 1% of the price is imposed on good X, then equilibrium quantity of X exchanged declines by what percentage?
- Price Amount Requested (Unit) Amount Offered (Unit) (IDR) 2400 120 180 2000 160 150 Based on the demand function and supply function that you got in question number 1 above, determine the new market equilibrium point if the government imposes a perunit sales tax (fixed tax) on the goods "X" of Rp. 100 / unit. How much is the tax burden borne by consumers and the tax burden borne by producers, and how much is the government tax revenueassuming interest rates of 5% per annum? (b) The demand and supply functions of a good are given by 4P =-Qd+ 102 5P Q+ 6 where P, Qd, and Q, denote the price, quantity demanded, and quantity supplied, respectively. (i) Determine the equilibrium price and quantity. (i) Determine the effect on the market equilibrium if the government decides to impose a fixed tax of GH¢9 on each good. Who pays the tax?(a) Suppose in a competitive market, the market demand curve for salt is infinitelyinelastic. What is the impact of a per-unit tax (i.e. a specific tax) on the priceof salt that consumers pay? Suppose the demand curve for butter is Q = 50 − 3P and the supply curve isQ = 2P. Suppose the government announces a per-unit tax of 1 on the priceof butter. Tax on butter can be seen as a ’fat tax’. What is the overall effectof a fat tax on the consumers? Please do not use chat gpt and answer the best way it can be.
- Suppose the demand for cigarettes is Q = 15 - 0.5Pand the supply of cigarettes is Q = P - 3, where P is the price per pack of cigarettes. Suppose the government imposes a cigarette tax of $3 per pack. (a) What is the price paid by producers and price faced by consumers? (b) What is the government revenue from the tax and What is the total dollar amount of tax revenue that is ultimately paid by consumers (i.e. consumers' tax burden)? (c) What is the excess burden of the tax?The demand and supply equations for a product are: Q"= 300 – 6P and Q' = -40 + 6P. Determine the market equilibrium and draw graphs. Suppose that the government decides to impose a flat tax of 10% on each unit sold. Show that the price that consumers pay would be the same if the government imposed a tax of Rs. 1.70 per unit sold. Draw graphs and explain. • Also calculate the total revenue earned by sellers before and after the tax, the tax revenue raised by the government, changes in consumer and producers surplus and dead weight loss.A market for a certain type of golf clubs has the following supply and demand: QD where p denotes the unit price. 25p —D 4,500 - 20р, (a) Find the number of golf clubs produced and the equilibrium price. What is the consumer and producer surplus? (b) Suppose that a unit tax of nine dollars is levied on the producers of golf clubs. Find the number of golf clubs sold. What is the consumer and producer surplus in this case? ce wa се (c) How is the tax burden shared? cro.com
- Consider a product that is fixed on supply QS=4 and the demand for the product is givenby QD= 10-2P. The government imposes a unit tax of 2 TL per kg on the consumer.a) What is the price paid by consumer and producers before the tax and after the tax?b) Find the total tax burden, burden on consumers and burden on producers.c) Suppose that supply schedule is changed to QS= 4+P. Redo the above questions and compare the results thanks in advanceThe demand and supply functions for product M are P = 83.6 - 0.037 Q P = 15.7 + 0.056 Q. A P10 tax per units is levied to the producer. Question: What is the P received by the seller after the imposition of tax? and how much will be the tax burden on the part of the producer after the imposition of tax? How much will be the tax burden in the part of buyer on the other hand?Suppose that the demand for good is given by D = 10 − p. Recall that the demand is a function which shows the amount of good demanded at each price level. Further, suppose that the supply for the same good is given by S = p + 1. (a) Find the market equilibrium price and quantity. (b) Find consumer surplus, producer surplus and total surplus. (c) Now, suppose that the tax of 1 AZN per unit is imposed on sellers. Find new equilibrium.