Supply and demand curves for a consumer item are given by q = S(p) = 500 +p and q = D(p) = %3D 2300 - 2p respectively. p is the price, in dollars for one unit of this item and q is the number of units. The equilibrium price is p* = $600 as you can check for yourself. A sales tax of 3.8%, to be directed at the consumers, is under consideration. Ultimately, the suppliers will bare some of the burden for this tax since it will cause the equilibrium price to drop. Determine the amount of money per item that supplies stand to lose due to this tax which is directed at the consumers. Give your answer as a dollar amount that has been rounded to the nearest cent as in 23.98 or 8.32 for example.

Supply and demand curves for a consumer item are given by q = S(p) = 500 +p and q = D(p) = %3D 2300 - 2p respectively. p is the price, in dollars for one unit of this item and q is the number of units. The equilibrium price is p* = $600 as you can check for yourself. A sales tax of 3.8%, to be directed at the consumers, is under consideration. Ultimately, the suppliers will bare some of the burden for this tax since it will cause the equilibrium price to drop. Determine the amount of money per item that supplies stand to lose due to this tax which is directed at the consumers. Give your answer as a dollar amount that has been rounded to the nearest cent as in 23.98 or 8.32 for example.

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

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 9E

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