3. Consider the following demand and supply functions: Qa = 80 – 2P Q, = -100 + 8P (i) Find the equilibrium price and quantity (ii) (iii) Suppose govt. imposes a sales tax of TK.4 per unit, calculate the new equilibrium price and quantity. Suppose govt. provides subsidy of TK.3 per unit, calculate the new equilibrium price and quantity.

3. Consider the following demand and supply functions: Qa = 80 – 2P Q, = -100 + 8P (i) Find the equilibrium price and quantity (ii) (iii) Suppose govt. imposes a sales tax of TK.4 per unit, calculate the new equilibrium price and quantity. Suppose govt. provides subsidy of TK.3 per unit, calculate the new equilibrium price and quantity.

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 3CQQ

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