Problem 3. Given that the farm gate price of product x is PHP 15.00/kg, Q1 is 350 kg and Q2 is 300 kg; a) what will be the tax revenue if buyer's price (with tax) is 20% higher than the the farm gate price? b) what is the value of the deadweight loss? Price PB Ps 0 B D C Supply Demand Q2 Q₁ Quantity

Problem 3. Given that the farm gate price of product x is PHP 15.00/kg, Q1 is 350 kg and Q2 is 300 kg; a) what will be the tax revenue if buyer's price (with tax) is 20% higher than the the farm gate price? b) what is the value of the deadweight loss? Price PB Ps 0 B D C Supply Demand Q2 Q₁ Quantity

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 11E: Federal excise taxes on gasoline vary widely across the developed world. The United States has the...

See similar textbooks

Similar questions

Consider an ad-valorem tax on a good X. The Demand for good X is constant elasticity with elasticity -2. The Supply for good Y is constant elasticity with elasticity 3. Consider the same setting as for the previous question. When a tax of 1% of the price is imposed on good X, then equilibrium quantity of X exchanged declines by what percentage?
iven the following demand and supply functions Qd = 220−5P Qs = −20+3P if a per unit tax of 8 is imposed on the commodity, i. 1860 2575 i.determine the equilibrium price and quantity before the imposition of the tax. ii. Determine the equilibrium price and quantity after the imposition of the tax. iii. compare the results in (i) and (ii). error_outlineHomework solutions you need when you need them. Subscribe now.arrow_forward Question Asked Sep 2, 2020 1 views Given the following demand and supply functions Qd = 220−5P Qs = −20+3P if a per unit tax of 8 is imposed on the commodity, i. 1860 2575 i.determine the equilibrium price and quantity before the imposition of the tax. ii. Determine the equilibrium price and quantity after the imposition of the tax. iii. compare the results in (i) and (ii). iv. graph the results in (i) and (ii). Please I need solution for only iv Thank you
Which of the following statements is correct? O a.Total surplus before the tax ia imposed is $180. O b. After the tax is imposed, consumer surplus is 25 porcent of its pre-tax value O c. After the tax is imposed, producer surplut is 36 percent of its pro-tax value. 0 d. All of the above are coroct
GIVEN FOR 1-4; The demand curve for prepaid internet services is given by Pd = 80 – 0.2Q andthe supply curve is given by Ps = 20 + 0.2Q, -------> answer by using TRUE or FALSE. If the statement is correct, write TRUE on your answer sheet. If the statement is incorrect, write FALSE. Explain why you answered TRUE or FALSE. Questions 1-4; 1. The consumer surplus (CS) is estimated at 2250. 2. An imposition of a tax of PHP10 per unit on prepaid internet services will result in aproducer surplus (PS) equivalent to 1262.5. 3. An imposition of a tax of PHP 10 per unit will reduce the CS by 687.5 and PS by 687.5.Thus, the net loss to society with the imposition of a tax is 1375. 4. The tax collected by the government with the imposition of this tax is equivalent to 1500.This tax revenue is a net loss to society.
The supply and demand curves for bananas are as follows: QD = 3,750 - 725P QS = 920 + 690P where Q = millions of bushels and P = price per bushel. a) Calculate the equilibrium price and quantity that would prevail in the free market. b) The government has imposed a $2.80 per bushel support price. How much bananas will the government be forced to purchase? c) Calculate the change (gain/loss) in consumer surplus that would occur due to the support program. Does the consumer surplus increase or decrease under the program?
6c Suppose that the government imposes a constant per-unit tax of 2 centon producers. In the diagram, show the effect of this tax on the prices ofplastic bags faced by buyers and sellers.
a. The market demand and supply functions for VCR movie rentals are:QD=10-0.04P and QS=3.8P+4.Suppose that VCR movie rentals are taxed at $0.25 per unit. Calculate:i. the equilibrium quantity and price, point elasticity of demand in equilibrium andproducer surplus without tax.ii. the revenues generated by the tax, the loss in producer surplus and percentageof the burden of the tax falls on producers?b. Determine the "rule-of-thumb" price when the monopolist has a marginal cost of $25and the price elasticity of demand of -3.0.
The demand and supply functions for a type of good are shown by the equation: Qd = 1500-10P and Qs = 20P-1200.Each item sold is subject to a tax of IDR 15.00 per unit.Define: a. Price and balance before tax.b. Price and balance after tax.c. Draw the two balances on a cross axis.d. Producer 's tax burden .e. Government revenue from taxes on the sale of the goods.
7. Assuming a $6 per unit tax is imposed, what will be the quantity traded? (a) 4 (b) 8 (c) 12 (d) 14 (e) 18 8. Assuming a $6 per unit tax is imposed, how much revenue will the government collect? (a) $20 (b) $32 (c) $40 (d) $48 (e) $60 9. Assuming the government subsidizes this good to the tune of $6 per unit, what will be the total cost of the subsidy? (a) $112 (b) $96 (c) $56 (d) $42 (e) $14
Market supply of Mandrake root is given by Q=4P. The government ofimposes a per unit tax of $5 and producers pay the tax. What is thehighest market price of Mandrake at which producers will sell at least 34units?
Qd = 1,600 - 125P Qs = 440 + 165P Quantities are measured in millions of bushels; prices are measured in dollars per bushel. a. Calculate the equilibrium price and quantity that will prevail under a completely free market. b. Calculate the price elasticities of supply and demand at the equilibrium values. c. The government currently has a $4.50 bushel support price in place. What impact will this support price have on the market? Will the government be forced to purchase corn under a program that requires them to buy up any surpluses? If so, how much? 1四 "cause" causes
A firm’s own MAC function = -29Q + 298. Suppose the emission tax is $95/ton/month. a. Draw the firms’ MAC curve and find the efficient level of emissions for the firm. b. Then what would be the total tax bill and total abatement cost at the efficient level of emissions? As a result, what would be the total cost for the firm? c.Explain why the firm would not reduce its emissions to 1 ton/month. Please explain each carefully.