Suppose there is a market that has market demand characterized as X = 30P/3. Suppose further that market supply can be written as X = P/2 2. (A) Find the equilibrium price and quantity in this market. (B) If a unit tax of $16 is imposed on good X, what are the equilibrium price, quantity, and tax revenue in the market?(C) Suppose an ad valorem tax of 30 percent is imposed on good X. The after - tax demand equation would be X = 30 P/2. Now find the equilibrium price, quantity, and tax revenue in the market. (D) What can be said about the amount of tax revenue generated under each taxing scheme, and why?

Suppose there is a market that has market demand characterized as X = 30P/3. Suppose further that market supply can be written as X = P/2 2. (A) Find the equilibrium price and quantity in this market. (B) If a unit tax of $16 is imposed on good X, what are the equilibrium price, quantity, and tax revenue in the market?(C) Suppose an ad valorem tax of 30 percent is imposed on good X. The after - tax demand equation would be X = 30 P/2. Now find the equilibrium price, quantity, and tax revenue in the market. (D) What can be said about the amount of tax revenue generated under each taxing scheme, and why?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.10P

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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
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