na competitive market where the supply price in dollars is determined by p = 3 + 0.25q and the demand price is determined by p = 15 – 0.75q. The government imposes a $4 tax per unit. How much will the price rise for consumers?

na competitive market where the supply price in dollars is determined by p = 3 + 0.25q and the demand price is determined by p = 15 – 0.75q. The government imposes a $4 tax per unit. How much will the price rise for consumers?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 30CTQ: In a market where the supply curve is perfectly inelastic how does an excise tax affect the price...

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Question

In a competitive market where the supply price in
dollars is determined by p = 3 + 0.25q and the
demand price is determined by p = 15 – 0.75q.
The government imposes a $4 tax per unit.
How much will the price rise for consumers?
What will be the new after tax "per unit revenue"
for firms?
How much money will the government collect in
taxes?

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