demand for a 50-lbs bag of nitrogen T fertilizer is Pd = 150-8*Q, where Pd is the consumer's price in $/bag and Q is the quantity purchased per day. The inverse supply of nitrogen fertilizer can be G represented by Ps= 10 + 2*Q, where Ps is the producer's price. A) What are the equilibrium price and quantity? B) Sketch a supply-demand diagram to illustrate this market. C) What is the consumer surplus (CS)? Producer surplus (PS)? 9. D) Suppose a tax on fertilizer of $10/b= imposed. What are the new equilibrium quantity, the producer price (Ps), and the consumer price (Pd) after the tax is imposed? E) Calculate the change in PS and CS due to the tax. F) Calculate the tax revenue and deadweight loss.
demand for a 50-lbs bag of nitrogen T fertilizer is Pd = 150-8*Q, where Pd is the consumer's price in $/bag and Q is the quantity purchased per day. The inverse supply of nitrogen fertilizer can be G represented by Ps= 10 + 2*Q, where Ps is the producer's price. A) What are the equilibrium price and quantity? B) Sketch a supply-demand diagram to illustrate this market. C) What is the consumer surplus (CS)? Producer surplus (PS)? 9. D) Suppose a tax on fertilizer of $10/b= imposed. What are the new equilibrium quantity, the producer price (Ps), and the consumer price (Pd) after the tax is imposed? E) Calculate the change in PS and CS due to the tax. F) Calculate the tax revenue and deadweight loss.
Chapter4: Demand, Supply, And Market Equilibrium
Section: Chapter Questions
Problem 21P
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E3
Transcribed Image Text:demand for a 50-lbs bag of nitrogen T
fertilizer is Pd = 150-8*Q, where Pd is the
consumer's price in $/bag and Q is the
quantity purchased per day. The inverse
supply of nitrogen fertilizer can be G
represented by Ps= 10 + 2*Q, where Ps
is the producer's price.
A) What are the equilibrium price and
quantity?
B) Sketch a supply-demand diagram to
illustrate this market.
C) What is the consumer surplus (CS)?
Producer surplus (PS)?
9.
D) Suppose a tax on fertilizer of $10/b=
imposed. What are the new equilibrium
quantity, the producer price (Ps), and the
consumer price (Pd) after the tax is
imposed?
E) Calculate the change in PS and CS due
to the tax.
F) Calculate the tax revenue and
deadweight loss.
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