14.4 Suppose the demand for frisbees is given by Q 100 2P and the supply...
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14.4 Suppose the demand for frisbees is given by Q 100 2P and the supply by Q 20 6P.
a. What will be the equilibrium price and quantities for frisbees?
b. Suppose the government levies a tax of $4 per frisbee. Now what will be the equilibrium quantity, the price consumers will pay, and the price firms will receive? How is the burden of the tax shared by buyers and sellers?
c. How would your answers to parts
(a) and
(b) change if the supply curve were instead Q 70 P?
What do you conclude by comparing these two cases?
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Related Book For 
Microeconomic Theory Basic Principles And Extensions
ISBN: 9780324270860
9th Edition
Authors: Walter Nicholson
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