12. Suppose that a market is described by the following supply and demand equations: QS = 2P...
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12. Suppose that a market is described by the following supply and demand equations:
QS = 2P QD = 300 – P
a. Solve for the equilibrium price and the equilibrium quantity.
b. Suppose that a tax of T is placed on buyers, so the new demand equation is QD = 300 – (P + T).
Solve for the new equilibrium. What happens to the price received by sellers, the price paid by buyers, and the quantity sold?
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Jehal Shah
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