In the market for millet, the demand curveisQ=50-3P and the supply curve is Q=2P. The government decides to raise revenue by taxing consumers ¢5/3 for every tonne of millet purchased. Theprice(P) is measured in Ghana cedi per tonne; and, quantity(Q) is in tonnes. Use this information to answer questions a and b. a). Compute the equilibrium quantity and price of millet in this market. b). Calculate the deadweight loss due to the tax policy.

In the market for millet, the demand curveisQ=50-3P and the supply curve is Q=2P. The government decides to raise revenue by taxing consumers ¢5/3 for every tonne of millet purchased. Theprice(P) is measured in Ghana cedi per tonne; and, quantity(Q) is in tonnes. Use this information to answer questions a and b. a). Compute the equilibrium quantity and price of millet in this market. b). Calculate the deadweight loss due to the tax policy.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter5: Markets In Motion And Price Controls

Section: Chapter Questions

Problem 9P

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