Consider the following demand and supply functions. Demand: D(p) = 2920 – 10p Supply: S(p) = 20p – 410 a) First, assume that no taxes are imposed. Find the equilibrium price and quantity. Equilibrium Price= 111 Equilibrium Quantity = 1810 b) Now assume a specific tax of $11 per unit is imposed on consumers. Find the new equilibrium price and quantity. New Equilibrium krice= New Equilibrium Quantity %3D c) What portion of the tax is paid by the consumer and what portion of the tax is paid by the producer? Consumer pays Producer pays d) How much is the total tax revenue generated for the government? Tax revenue =

Consider the following demand and supply functions. Demand: D(p) = 2920 – 10p Supply: S(p) = 20p – 410 a) First, assume that no taxes are imposed. Find the equilibrium price and quantity. Equilibrium Price= 111 Equilibrium Quantity = 1810 b) Now assume a specific tax of $11 per unit is imposed on consumers. Find the new equilibrium price and quantity. New Equilibrium krice= New Equilibrium Quantity %3D c) What portion of the tax is paid by the consumer and what portion of the tax is paid by the producer? Consumer pays Producer pays d) How much is the total tax revenue generated for the government? Tax revenue =

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Application: The Cost Of Taxation

Section: Chapter Questions

Problem 10PA

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