Suppose demand for good X is given by QD=900- 1/2P where p is the price and QD the quantity demanded Supply is grven by QS = 1/4P. a) Suppose 60 TL tax is imposed on each unit of X that is purchased What are the equilibrium price and quantity of X after the tax is imposed? b) What is the burden of the tax? Explain the key factors that determine the incıdence of the tax

Suppose demand for good X is given by QD=900- 1/2P where p is the price and QD the quantity demanded Supply is grven by QS = 1/4P. a) Suppose 60 TL tax is imposed on each unit of X that is purchased What are the equilibrium price and quantity of X after the tax is imposed? b) What is the burden of the tax? Explain the key factors that determine the incıdence of the tax

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter17: Taxation And Resource Allocation

Section: Chapter Questions

Problem 4TY

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Suppose demand for good X is given by QD = 900- 1/2P where p is the price and QD the quantity demanded. Supply is given by QS = 1/4P. a) Suppose 60 TL tax is imposed on each unit of X that is purchased. What are the equilibrium price and quantity of X after the tax is imposed?
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