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explain Q (b) for me please Thu Oct 10 Tutorial 6-1 (1) - 5 + X Tutorial 6_solutions - Version for 2019 Tutorial 6-1011 Prices
explain Q (b) for me please
Thu Oct 10 Tutorial 6-1 (1) - 5 + X Tutorial 6_solutions - Version for 2019 Tutorial 6-1011 Prices and Markets Tutorial 6: Government Failure - The costs of taxation and international trade restrictions Q1: You are a consultant for Treasury department of Australia. You have been presented with the following demand and supply diagram for the marker for coffee. $/kg - - Nw 0 1 2 3 4 5 6 7 8 9 tons Figure 1: Demand and Supply for Coffee. Based on the diagram, you will have to advise the Government about the effect of an intervention in this market. The treasury specifically wants to know answers to the following questions (a) What is the equilibrium price and quantity? P: Q: 6 Tons (b) Suppose the government levies a sales tax of 100% (if the producer price is $1, the producer would have to charge the consumer an extra $1, so the new consumer price will be $2). What is the new equilibrium price and quantity? $ 6, 4 Toh (c) What are the changes in the consumer and producer surpluses, due to the intervention? X ? L TStep by Step Solution
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