The market for widgets can be described by the following equations: Demand: P = 10 -Q Supply: P = Q- 4 Equilibrium price is $3 and equilibrium quantity is 7. a) Suppose that government imposes a tax of $0.5 per unit to reduce widget consumption. What will the new cquilibrium and quantity be? b) What price will the buyer pay? %3D %3D 3.

The market for widgets can be described by the following equations: Demand: P = 10 -Q Supply: P = Q- 4 Equilibrium price is $3 and equilibrium quantity is 7. a) Suppose that government imposes a tax of $0.5 per unit to reduce widget consumption. What will the new cquilibrium and quantity be? b) What price will the buyer pay? %3D %3D 3.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 8MC

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