Please solve 4 part I Give upvote and good feedback. Tax Incidence and EfficiencyThe market demand for a product is Q-270-6P, and the market supply is Q,= -130 + 10P, where Q, and Q, are quantitydemanded and supplied, respectively, and P is price.Questions:a. What is equilibrium price and quantity in this market?EquatriumPrice:EquilibriumQuantityb. Enter a formula to calculate price elasticity of demand using the equilibrium price and quantity as the base values.c. Enter a similar formula to calculate price elasticity of supply. d. Suppose the government imposes a $1.25 tax per unit.d1. Use the values for price elasticity of demand and supply to calculate the tax burden on consumers relative to suppliers (or producers).(Note: The sign of your answer should be negative)d2. What is the actual tax burden on suppliers?63. What is the actual tax burden on consumers?64. Calculate the deadweight loss of the tax, using only the price elasticity of demand and supply, the per-unit tax, and equilibrium price and quantity.

The equilibrium price is the price at which the quantity of a good or service supplied by producers…

d. Suppose the government imposes a $1.25 tax per unit d1. Use the values for price elasticity of demand and supply to calo (Note: The sign of your answer should be negative) d2. What is the actual tax burden on suppliers 63. What is the actual tax burden on consumers? 64. Calculate the deadweight loss of the tax, using c rden on consumers relat price elasticity of demand and supply. ppliers for producers) and quantity.

d. Suppose the government imposes a $1.25 tax per unit d1. Use the values for price elasticity of demand and supply to calo (Note: The sign of your answer should be negative) d2. What is the actual tax burden on suppliers 63. What is the actual tax burden on consumers? 64. Calculate the deadweight loss of the tax, using c rden on consumers relat price elasticity of demand and supply. ppliers for producers) and quantity.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter20: Elasticity: Demand And Supply

Section: Chapter Questions

Problem 15E

See similar textbooks

Similar questions

Explain why using the midpoint formula for calculating the elasticity of demand gives the same result whether price increases or decreases, but using the initial price and quantity instead of the average does not.
Describe the general appearance of a demand or a supply curve with infinite elasticity.
An increase in the supply of a good will decrease the total revenue producers receive if a. the demand curve is inelastic. b. the demand curve is elastic. c. the supply curve is inelastic. d. the supply curve is elastic.
If supply is elastic, will shifts in demand have a larger effect on equilibrium quantity or on price?
If demand is elastic, will shifts in supply have a larger effect on equilibrium quantity or on price?
Will demand curves have the same exact shape in all markets? If not, how will they differ?
When someones kidneys fail, the person needs to have medical treatment with a dialysis machine (unless or until they receive a kidney transplant) or they will die. Sketch a supply and demand diagram, paying attention to the appropriate elasticities, to illustrate that the supply of such dialysis machines will primarily determine the pure.
If demand is inelastic, will shifts in supply have a larger effect on equilibrium price or on quantity?
The New York Times reported (Feb. 17, 1996) that subway ridership declined after a fare increase: There were nearly four million fewer riders in December 1995, the first full month after the price of a token increased 25 cents to 1.50, than in the previous December, a 4.3 percent decline. a. Use these data to estimate the price elasticity of demand for subway rides. b. According to your estimate, what happens to the Transit Authoritys revenue when the fare rises? c. Why might your estimate of the elasticity be unreliable?
From the data in Table 5.6 about supply of alarm clocks, calculate the price elasticity of supply from: point J to point K, point L to point M, and point N to point P. Classify the elasticity at each point as elastic, inelastic, or unit elastic.
Would you expect supply to play a more significant role in determining the price of a basic necessity like food or a luxury like perfume? Explain. Hint: Think about how the price elasticity of demand will differ between necessities and luxuries.