Answer the questions in Problem 44, assuming that the 5% sales tax is imposed on the supplier

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Answer the questions in Problem 44, assuming that the 5% sales tax is imposed on the supplier instead of the consumer.


Data from in Problem 44

The demand and supply curves are given by q = 100 − 2p and q = 3p − 50, respectively; the equilibrium price is $30 and the equilibrium quantity is 40 units. A sales tax of 5% is imposed on the consumer.

(a) Find the equation of the new demand and supply curves.
(b) Find the new equilibrium price and quantity.
(c) How much is paid in taxes on each unit? How much of this is paid by the consumer and how much by the producer?
(d) How much tax does the government collect?

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Applied Calculus

ISBN: 9781119275565

6th Edition

Authors: Deborah Hughes Hallett, Patti Frazer Lock, Andrew M. Gleason, Daniel E. Flath, Sheldon P. Gordon, David O. Lomen, David Lovelock, William G. McCallum, Brad G. Osgood, Andrew Pasquale

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