Question
6. Consider a market in which the demand curve is given by Q = 19 - 2P. The supply curve is given by P =
6. Consider a market in which the demand curve is given by Q = 19 - 2P. The supply curve is given by P = 9. The government is considering imposing a tax. If the government wants to maximize the tax revenue collected from this market, the optimal tax rate would be [Answer] per unit.
(In decimal numbers, with two decimal places, please.)
10. Suppose a commodity tax of $12 per unit is imposed on a good. The supply curve is linear and upward sloping and the demand curve is linear and downward sloping. The tax causes the equilibrium quantity of the good to decrease from 1400 units to 1250 units. The total reduction in the consumer surplus and producer surplus equals [Answer].
(In decimal numbers, with two decimal places, please.)
11. Consider a market in which the demand is given by P = 98 - 2Q. The supply is given by P = 2Q. Now suppose that the government provides a subsidy of 27 dollars per unit. The increase in the equilibrium quantity is [Answer] units.
(In decimal numbers, with two decimal places, please.
12. Compared with the case without the subsidy, the welfare loss is $[Answer].
(In decimal numbers, with two decimal places, please.)
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