Q³ = 100 + 3P Qd = 400 – 2P where Q³ is the quantity supplied, Qª is the quantity demanded and P is price. From this information compute equilibrium price and quantity. b. Now suppose that a tax is placed on buyers so that Qª = 400 – (2P + T) where T is taxes. If T = 15, solve for the new equilibrium price and quantity. (Note: You are solving for the equilibrium price for sellers and buyers). c. The income elasticity of Abigail's demand for CDs is 0,75. For Abigail Cds are a normal good or an inferior good? Explain your answer. d. Years ago, Ricky paid $500 for CDs to put together a collection. Today, he sold his CDs for $200. How does this sale affect current GDP?

Q³ = 100 + 3P Qd = 400 – 2P where Q³ is the quantity supplied, Qª is the quantity demanded and P is price. From this information compute equilibrium price and quantity. b. Now suppose that a tax is placed on buyers so that Qª = 400 – (2P + T) where T is taxes. If T = 15, solve for the new equilibrium price and quantity. (Note: You are solving for the equilibrium price for sellers and buyers). c. The income elasticity of Abigail's demand for CDs is 0,75. For Abigail Cds are a normal good or an inferior good? Explain your answer. d. Years ago, Ricky paid $500 for CDs to put together a collection. Today, he sold his CDs for $200. How does this sale affect current GDP?

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Application: The Cost Of Taxation

Section: Chapter Questions

Problem 10PA

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