Consider the demand and supply for strawberries to be given by Qd= 10-0.33P and Qs=-6+P and the government imposes per unit tax of $T, such that the total government revenue of $32 is generated at a new equilibrium price of $18. What is the amount of per unit tax in this case? OPTIONS: (i) $8 (ii) $1.77 (iii) $10 (iv) $12
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A: The correct option is option a. The workings are given in the next step.
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Q: consider the demand and supply for strawberries to be given by Qd=10-0.33P and Qs=-6+P, and the…
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Consider the demand and supply for strawberries to be given by Qd= 10-0.33P and Qs=-6+P and the government imposes per unit tax of $T, such that the total government revenue of $32 is generated at a new
OPTIONS:
(i) $8
(ii) $1.77
(iii) $10
(iv) $12
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- The demand and supply curves for a product are given in terms of price, P , by 3400 – 30p and 9 = 10p – 600. (a) Find the equilibrium price and quantity. The equilibrium price is 2$ and the equilibrium quantity is units. (b) A specific tax of $16 per unit is imposed on suppliers. Find the new equilibrium price and quantity. The new equilibrium price (including tax) is $ and the new equilibrium quantity is units. (c) How much of the $16 tax is paid by consumers and how much by producers? The tax paid by the consumer is $ and the tax paid by the producer is 2$ of the tax. (d) What is the total tax revenue received by the government? The total tax revenue received by the government isSuppose the demand for cigarettes is Q = 15 - 0.5Pand the supply of cigarettes is Q = P - 3, where P is the price per pack of cigarettes. Suppose the government imposes a cigarette tax of $3 per pack. (a) What is the price paid by producers and price faced by consumers? (b) What is the government revenue from the tax and What is the total dollar amount of tax revenue that is ultimately paid by consumers (i.e. consumers' tax burden)? (c) What is the excess burden of the tax?In this problem, p is the price per unit in dollars and q is the number of units. If the weekly demand function is p = 128 – 2g2 and the supply function before taxation is p = 20 + 9g, what tax per item will maximize the total tax revenue? /item
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- The demand (D) and supply (S) function for a commodity are P =100 – 2Q and P = 10 + Q, respectively. (a) Find the equilibrium price and quantity. That is, find the price and quantity where the D and S functions intersect. (b) A new 10% tax is imposed on this commodity. Find the burden of the tax on demanders and the burden on suppliers. Also find the total taxes. [In order to insure that we all do this problem in the same way, let’s assume that the tax is imposed on the supply side of the market. In addition, the burden of the tax on demanders is the difference in price demanders pay when the tax is in existence less the price they paid when there was no tax. The burden on suppliers is the difference in price suppliers received when there was no tax and the net price (after remitting tax to the government) they receive when the tax is in existence.]The demand (D) and supply (S) function for a commodity are P=100 - 20 and P = 10 + Q, respectively. (a) Find the equilibrium price and quantity. That is, find the price and quantity where the D and S functions intersect. (b) A new 10% tax is imposed on this commodity. Find the burden of the tax on demanders and the burden on suppliers. Also find the total taxes. [In order to insure that we all do this problem in the same way, let's assume that the tax is imposed on the supply side of the market. In addition, the burden of the tax on demanders is the difference in price demanders pay when the tax is in existence less the price they paid when there was no tax. The burden on suppliers is the difference in price suppliers received when there was no tax and the net price (after remitting tax to the government) they receive when the tax is in existence.]If a $6 per unit excise (sales) tax is imposed, who will suffer the greater burden of this tax, the suppliers or demanders? a) Demanders b) Suppliers c) Both share the burden equally d) Can't tell from the available information
- The demand (D) and supply (S) function for a commodity are P =100 – 2Q and P = 10 + Q, respectively. (a) Find the equilibrium price and quantity. That is, find the price and quantity where the D and S functions intersect. (b) A new 10% tax is imposed on this commodity. Find the burden of the tax on demanders and the burden on suppliers. Also find the total taxes.C) Given the following information: QD- 240-5P QS= P Where QD is the quantity demanded, QS is the quantity supplied and P is the price. Suppose the government decided to impose tax of $12 per unit on sellers in this market. Determine quantity after taxConsider a market with the following demand and supply curves: Q (p) = 20 – 2P Q (p) = - 10 + 3P (b)Suppose the government imposed a sales tax of $0.80 per unit of output sold, find the price paid by the consumer, the price received by the supplier, the equilibrium quantity transacted, and the total tax revenue received by the government. (c)What do you think is the purpose for such tax policy? In your explanation, include a brief discussion of the importance of price elasticity of demand in the choice of commodities to be taxed in order to achieve specific policy goal(s).
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