Demand is Q=60-2p, Supply is Q=3p. Government imposes a per value tax of τ on producers (so, producers have to pay τ percent of the price they receive as a tax). Find such τ that maximizes the tax revenue of the government.

Demand is Q=60-2p, Supply is Q=3p. Government imposes a per value tax of τ on producers (so, producers have to pay τ percent of the price they receive as a tax). Find such τ that maximizes the tax revenue of the government.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter6: Elasticity

Section6.4: The Relationship Between Taxes And Elasticity

Problem 3ST

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