Answered: Consider a market for books. Demand is… | bartleby

Microeconomics A Contemporary Intro

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter16: Public Goods And Public Choice

Section: Chapter Questions

Problem 14PAE

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Question

Consider a market for books.
Demand is given by Qp=120-P.
Supply is given by Qs=5P.
The equilibrium price in this market is 20
The consumer surplus is 1000
The producer surplus is 5000
The total surplus is 6000
Suppose now the government introduces a $6 sales tax on each book.
The equilibrium price the producer receives (the price not including the tax) is now
19
The consumer surplus is now
The producer surplus is now
The government's revenue is 570
The deadweight loss is

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