he custom T-shirt printing business has many competitors, so that the perfect competition model may be considered a good approximation.

Currently, the market demand curve is given by

Q=120-1.5p

Market supply is given by

-20+2p

Please answer the following questions based on these supply and demand curves.

What is the market equilibrium price?

What is the market equilibrium quantity?

Suppose there is a T-shirt trend that increases demand by 10% (i.e., for each price, quantity demanded is now 10% higher).

What is the the intercept of the new demand curve?

What is the slope of the new demand curve (in absolute value)

What is the new market equilibrium price? (2 decimals)

What is the new market equilibrium quantity? (2 decimals)

Now let's go back to the original demand curve, but have the supply curve change.

Suppose that production costs go up by 10%. Please solve for inverse supply, and multiply it by 1.1.

What is the new intercept of the inverse supply curve?

What is the slope of the new inverse supply curve?

Now solve for non-inverse supply and set it equal to demand in order to find the new equilibrium,

What is the new equilibrium price?

What is the new equilibrium quantity?

Let's now consider an industry with market demand

Q=550-20p

and market supply

Q=100+10p

What is the equilibrium price?

What is the equilibrium quantity?

Now suppose each consumer must pay a $6 tax when they buy the good. I.e. their willingness to pay is now $6 less than before.

First, let's find the original inverse demand curve.

What is the intercept of this curve?

What is the slope? (in absolute value)

After the tax is imposed, what is the intercept?

After the tax is imposed, what is the slope? (in absolute value)

Now let's take this new inverse demand function and return it to direct demand. What is the intercept?

What is the slope (in absolute value)?

Now that we have found the new demand curve that reflects the tax, let's find the new equilibrium price.

How let's find the new equilibrium quantity.

Including the tax, what is the price paid by the consumers?

How much more are consumers paying, relative to before the tax?

What percentage of the tax are consumers paying (two decimals, number from 0 to 100)

What percentage of the tax are producers paying (two decimals, number from 0 to 100)

Now suppose that sellers are the ones who need to pay the tax. Let's first work on finding the seller's inverse supply curve.

What is the intercept their inverse supply?

What is the slope?

The tax means that sellers willingness to sell will be p+6.

What is the new intercept of inverse supply?

Returning to direct supply, what is the intercept now?

What is the slope?

Using this new supply curve and the original demand curve, please solve for market price.

Please solve for market quantity.

After accounting for the tax, what price do sellers take home?

How much has the price they receive decreased on account of the tax?

What percentage of the tax are producers paying (two decimals, number from 0 to 100)

What percentage of the tax are consumers paying here (two decimals, number from 0 to 100)