Consider a perfectly competitive market where the demand for the good is given by Q=777-18p, where Q denotes the quantity demanded at price p. On the supply side, the industry supply function is given by Q=-8+6p. The government imposes a per-unit tax on consumers equal to t=6 Derive the market equilibrium in the presence of this tax. Determine the share of the tax paid by producers and enter it below.

Consider a perfectly competitive market where the demand for the good is given by Q=777-18p, where Q denotes the quantity demanded at price p. On the supply side, the industry supply function is given by Q=-8+6p. The government imposes a per-unit tax on consumers equal to t=6 Derive the market equilibrium in the presence of this tax. Determine the share of the tax paid by producers and enter it below.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter6: Elasticities

Section: Chapter Questions

Problem 20P

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