n a competitive market the supply is given S(p)= 4p, and the demand is D(p)=1/p^2. p = the product price. The government is thinking about adding a tax to the product. How large will the portion of the tax that falls on consumer be? (Tax incidence on consumers)

n a competitive market the supply is given S(p)= 4p, and the demand is D(p)=1/p^2. p = the product price. The government is thinking about adding a tax to the product. How large will the portion of the tax that falls on consumer be? (Tax incidence on consumers)

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section5.A: Appendix: Price Elasticity And Tax Incidence

Problem 1AQ

See similar textbooks

Related questions

Q: The supply and demand functions in a market are: Qo = 5P 500 Qd = 4000 10P Calculate the market…

A: At equilibrium, the market demand equals the market supply. Consumer surplus measures the extent by…

Q: Market demand is given as Qd = 200 – P. The market supply is given as Qs = 4P. If at the current…

A: The market price is the value at which the goods and services are being sold in the market…

Q: Demand function Q, = 240 – 2P Supply function Qs =-60+P| According to the demand and supply…

A: Demand is the total quantity of products and services for which the consumers are willing to…

Q: In a certain market, the demand is given by Qd = 60 - 6P and the supply by Qs = 4P. Assume a price…

A: The price ceiling is a legal maximum on the price at which goods can be sold. Price ceiling can be…

Q: The inverse supply function for soda is: PS = 2 + QS The inverse demand function for soda is: PD =…

A: Since you have asked multiple question, we will answer first question for you. If you want any…

Q: The market for Mandrake root in Sodden is perfectly competitive. Market demand is given by Q=344-4P…

A: The perfect competition is a market type which is characterized by a large number of buyers and…

Q: Question 2e - part 2 Given the following information Qp = 240 – 5P Qs = P where Qp is the quantity…

A: Answer: Given: Demand function: QD=240-5P Supply function: QS=P Tax per unit on seller=$12…

Q: The demand function for a certain product is? = 86 − ?2and the supply function is? = ?2 + 6? +…

A: Following information is given: The demand function for a certain product isP = 86 − X2and the…

Q: Given: (x is number of items) Demand function: d(x) = 128 – 0.3x² Supply function: s(x) = 0.2a² Find…

A: Equilibrium is achieved at the output level where quantity demanded by consumer equals quantity…

Q: Q16. In a very short period market: ni (a) The supply is fixed. (b) The demand is fixed. () Demand…

A: In a very short period of the time Answer is Option(A) The supply is fixed Which has initially fixed…

Q: When a tax is placed on the sellers of a product the O demand for the product falls price of the…

A: Taxation: - Taxation is the imposition of some charges by the government of a country on the…

Q: The market for milk is given by: Demand: P = 70 - 0.8Q Supply: P = Q Suppose the government wants to…

A: Given; Demand; P = 70 - 0.8Q Supply; P = Q

Q: A consumer is willing to purchase an item for $30 but he gets item at a market price of $22.…

A: # There is a situation where the consumer has a more willingness to pay for a good then for what he…

Q: Consider a market where demand and supply satisfy the following equations QD = 12 – 2 P, QS = 2P.…

A: QD=12-2PQS=2P Find: Price floor that maximizes producer surplus. Solution: When market is in…

Q: If market demand for a good is Q = 250 -2P and supply of the good is Q = 8P, the equilibrium price…

A: Equilibrium is reached where demand curve intersects supply curve. Equilibrium price is at the…

Q: Active learning (3) » 1. The demand function for a certain product is q=20-2p, and the supply…

A: Hi. Since there are two questions we will answer only the first one. 1.Price is set at equilibrium…

Q: In the following question you are asked to determine, other things equal, the effects of a given…

A: When excise tax on product X is removed, the cost of production decreases thereby causing profit…

Q: Demand is given by P(Q) = 180 – 4 x Q. The market price is £50. How many units are demanded?

A: Demand: - Demand is the relationship between the quantity demanded and the price of a good. There is…

Q: What effect will each of the following have on the supply of auto tires? The levying of a per-unit…

A: Supply: Supply shows the direct relationship between price and quantity supplied. When there is a…

Q: Suppose that P represents price. Quantity demanded is given by: Qd = 61- 3 P and Supply is…

A: Qd = 61 - 3P -----------> Demand equation Qs = 3 + 2P -------------> Supply equation Where Qd…

Q: Consider a market for books. Demand is given by Qp=120-P. Supply is given by Qs=5P. The equilibrium…

A: "Since you have asked a question with multiple sub-parts, we will solve first three sub-parts for…

Q: The market equilibrium price Is $100 And the market demand curve is given as:- 7Q - 40 = P…

A: The information being given is:- Equilibrium price = $100 Market demand curve is given as:- 7Q - 40…

Q: In this problem, p is the price per unit in dollars and q is the number of units. Suppose the weekly…

A: Tax incidence refers to the burden of tax on the particular person whether he is producer or a buyer…

Q: Suppose the demand for pickles on The Citadel is Qd=500-4P, and the supply is Qs=6P. Assume this…

A: A equilibrium price and output is determined where demand is equal to supply. A tax creates a wedge…

Q: Choose the best statement. ... A. Producer surplus equals the total revenue from selling the good.…

A: At the marketplace, producer surplus refers to the addition gain to producers when they sell a…

Q: In this problem, p is in dollars and x is the number of units. The demand function for a certain…

Q: Cocoa (Cacao) beans and imported from South America. The government has decided to increase the tax…

A: Net exports is the difference between exports and imports. Imports is when a country buys goods from…

Q: In a competitive market, the market demand is Qd = 60 − 6P and the market supply is Qs = 4P. A price…

A: Here, demand and supply equations are given as: Qd = 60 − 6P Qs = 4P

Q: Demand and supply for a good are given as Qd = 100 - 2P and Qs = -8 + P, respectively (Q is in 1000…

A: DISCLAIMER “Since you have asked multiple question, we will solve the first three question for you.…

Q: Producer surplus is given to be $40 What will be the value of market price if minimum price…

A: The data presented in the question above is:- Producer surplus = $40 Minimum price accepted by…

Q: The market for Mandrake root in Sodden is perfectly competitive. Market demand is given by Q=294-3P…

A: Market demand= It is the ability and willingness of all consumers to buy different quantities of…

Q: The market has demand and supply curves represented by: P 10+0.001Q P 50-0.003Q If the price is held…

A: Demand Curve: - demand curve is the graphical way of showing the relationship between the quantity…

Q: Given: (x is number of items) Demand function: d(x) = 300 Supply function: s(x) = 0.4x 0.4x %3D Find…

A: Equilibrium is achieved at the output level where quantity demanded by consumer equals quantity…

Q: The market for cake is shown with the following supply and demand function. Demand: Q = 7500 -…

A: Demand function: It refers to the function which helps in determining the quantity demanded by the…

Q: If a tax is levied on the seller of a product the demand curve will shift downward will not change…

A: Tax is the amount of money from the income earned that individuals and corporations have to pay to…

Q: Question 2 You are the manager of medium-sized company that deals in production of make-ups in…

A: The imposition of a tax will raise production costs, lower output, and move the supply curve to the…

Q: Total surplus in this market is $ million.

A: Total Surplus = Consumer Surplus + Producer Surplus

Q: Given: (x is number of items) Demand function: d(x) = 200 – 0.3x Supply function: s(x) = 0.5x Find…

A: Given:d(x)=200-0.3xs(x)=0.5x

Q: The value of a price-distorting subsidy for a three-bedroom apartment is $100 per month. This means…

A: Answer - Given in the question - The value of a price-distorting subsidy for a three-bedroom…

Q: Consider a market where demand and supply satisfy the following equationse QD = 12 – 2 P,4 Qs = 2P.-…

A: We have the following information-QD = 12-2PQs = 2P(a) Find the current equilibrium price and…

Q: The demand function for a commodity is given by D(z) = 2000 - 0.1z- 1.01z2. Find the consumer…

Q: n a competitive market the demand curve is given by Q = 1600 –4P and supply by Q = 4P. What is the…

A: Total surplus is larger at the equilibrium quantity and price than it will be at any other quantity…

Q: 7. Good X is produced in a competitive market using input A. Explain what would happen to the supply…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…

Q: Calculate the producer surplus when the market price is $34 and the willingness to sell the product…

A: # Producer surplus is referred to be as the difference between the prevailing market price and the…

Question

In a competitive market the supply is given S(p)= 4p, and the demand is D(p)=1/p^2.
p = the product price.
The government is thinking about adding a tax to the product.

How large will the portion of the tax that falls on consumer be? (Tax incidence on consumers)

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

The output level that occurs in any market that is in equilibrium: a) is the quantity where the supply curve intersects the y-axis. b) is the quantity where the demand curve intersects the x-axis. c) is the quantity at an output level where buyers will pay more than suppliers require. d) is an output level where buyers will not pay as much as suppliers require. e) is the quantity where the demand and supply curves intersect each other. ?
What is producer surplus? Question 7 options: All other answers are incorrect The profit of the producer The area between the supply curve and the price (or, to be more accurate, a horizontal line representing the price) The unsold quantity of goods at the end of the day
___________ surplus is the difference between the maximum price a consumer is (or consumers are) willing to pay for a product and the actual [market] price. Producer Consumer
The demand schedule for the lobster market is linear. The equilibrium quantity of lobster is 7,363 and the equilibrium price of lobster is $11. the quantity demanded of lobster is 9,139 when the price drops to $5. What is the value of consumers surplus in the lobster market? Enter your answer using 2 decimal places. Round up if the third decimal place is 5 or higher. Do not enter "$" as part of your answer. Omit the units.
in a competitive market, if there should be a surplus of a product at a given price:
Starting from an initial equilibrium price, a surplus at that price can be created either by an increase in supply or a decrease in demand. TRUE FALSE
. Consider a market in which the demand curve is given by P = 191 - 1Q, and the supply curve is given by P = 8Q. What is the equilibrium price in the market? Give your answer to 2 decimal places.
The local government decides to impose a sales tax on some selected items. On item X the final prices increases almost the full amount of the tax, demand does not change much and the tax revenues collected are quite high. On item Y the price increases very little but demand falls quite a bit and very little tax revenue is collected. Is this a violation of the law of demand or something else? Explain.
Suppose that demand for a product is given by the equation P = 150 – 3Q while the supply curve is given by the equation P = 25 + 2Q. The equilibrium market price is ____ and the equilibrium quantity is ____
Consider a market for product X and demand is X = 44 - P where P is the price. If the price falls from P = $30 to P = $24, then total consumer surplus will rise by
A demand function for a product is P = 100 – 2.2Q and its supply function is P = 2.8Q, where P is the price of the product in pound sterling (£). Determine:(a) the market equilibrium quantity (Q0) and price (P0) (b) the consumer surplus at market equilibrium(c) the producer surplus at market equilibrium
in the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product x upon (1) the demand (d) for, or supply (s) of, x; (2) the equilibrium price (p) of x; and (3) the equilibrium quantity (q) of x An increasing the number of firms producing x will