Table 3. P Ps Qd tax Qs tax Qs $50 $70 240 $10 140 $60 $60 $70 200 $10 200 $60 $70 $70 160 $10 260 $60 $80 $70 120 $10 320 $60 20 $90 $70 80 $10 380 $60 80 $100 $70 40 $10 440 $60 140 $110 $70 $10 $60 500 200 At what price does the market reach equilibrium when the price of the substitute good equals $70 and the tax equals $60? Did the equilibrium price rise by $50, the increase in the tax? Explain how prices coordinate the behavior of buyers and sellers in markets.

Table 3. P Ps Qd tax Qs tax Qs $50 $70 240 $10 140 $60 $60 $70 200 $10 200 $60 $70 $70 160 $10 260 $60 $80 $70 120 $10 320 $60 20 $90 $70 80 $10 380 $60 80 $100 $70 40 $10 440 $60 140 $110 $70 $10 $60 500 200 At what price does the market reach equilibrium when the price of the substitute good equals $70 and the tax equals $60? Did the equilibrium price rise by $50, the increase in the tax? Explain how prices coordinate the behavior of buyers and sellers in markets.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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