Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Can you help me solve this exercise please? Thank you. Question 1 [24 points] Suppose the weekly demand for a certain good in thousands of

Can you help me solve this exercise please? Thank you.

image text in transcribedimage text in transcribed
Question 1 [24 points] Suppose the weekly demand for a certain good in thousands of units, is given by the equation P = 33 - 20. and the weekly supply curve of the good by the equation P = 9 + 20 where P is the price in dollars. Finally, suppose a per-unit tax of $8, to be collected from sellers is imposed in this market. Complete the following questions. Note: If necessary round your answers to two decimal places. a) Graph the weekly demand, supply (pre-tax), and supply (post-tax) equations. v Supply Curve (without tax) 6 8 10 12 14 16 18 Quantity (thousands oi unltslwaek) a b) What is the equilibrium price before the tax? lEquilibrium Price = $0 I c) What is the Consumer and Producer Surplus before the tax? Note: Remember that the quantity of units on the graph are in thousands. Producer Surplus = $0 consumer Surplus $0 _ https:f/laecon1.lyryx.com/student-servlets/ 3 ' LabServlet?ccid=3767# ' d) What is the new Consumer and Producer surplus after the tax is imposed? Note: Remember that the quantity of units on the graph are in thousands. Producer Surplus = $0 Consumer Surplus = $0 a) How much government revenue will this tax generate a week? Note: Remember that the quantity of units on the graph are in thousands. lGovernment Revenue = $0 per week

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Microeconomics and Its Application

Authors: walter nicholson, christopher snyder

11th edition

9781111784300, 324599102, 1111784302, 978-0324599107

More Books

Students also viewed these Economics questions