Suppose demand and supply are given by: Q^d=14-0.5P and Q^s=0.25P-1. Determine the equilibrium quantity and price in this market. Show the equilibrium graphically. Suppose a $12 excise tax is imposed on the good.Determine new supply and the new equilibrium quantity and price. How much does producers' revenue change?  How much tax revenue does the government earn?

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Author:Irvin B. Tucker
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Chapter4: Markets In Action
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Suppose demand and supply are given by: Q^d=14-0.5P and Q^s=0.25P-1.


Determine the equilibrium quantity and price in this market. Show the equilibrium graphically.

Suppose a $12 excise tax is imposed on the good.Determine new supply and the new equilibrium quantity and price.

How much does producers' revenue change? 

How much tax revenue does the government earn?

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