MICROECONOMICS W/CONNECT >IC<
MICROECONOMICS W/CONNECT >IC<
20th Edition
ISBN: 9781259550577
Author: McConnell
Publisher: MCGRAW-HILL CUSTOM PUBLISHING
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Chapter 3, Problem 5P
To determine

Subsidies on public colleges.

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Suppose demand and supply are given by: (LO3, LO4)Qx d = 14 −  1/2Px and Qx s = 1/4Px  − 1a. Determine the equilibrium price and quantity.
Suppose demand and supply are given by: (LO3, LO4)Qx d = 14 −  1/2Px and Qx s = 1/4Px  − 1c. How much tax revenue does the government earn with the $12 tax when the new equilibrium quantity is 2 units after tax .
**Asking for part (d) only** Suppose the demand for crossing the Golden Gate Bridge is given by Q = 10,000 − 1,000P. (LO6) a. If the toll (P) is $3, how much revenue is collected? b. What is the price elasticity of demand at this point? c. Could the bridge authorities increase their revenues by changing their price? d. In 2019, the San Francisco Bay area Water Emer- gency Transportation Authority (WETA) announced it was considering the implementation of hovercraft service as a supplement to existing ferries. Suppose that a fast hovercraft alternative to the Golden Gate Bridge is implemented between Marin County and San Francisco. How would the new service affect the elasticity of demand for trips across the Golden Gate Bridge?
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