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On a fully competitive market are the firms ready to sell as many units ad possible for a price of 10 usd. The demand curve
On a fully competitive market are the firms ready to sell as many units ad possible for a price of 10 usd. The demand curve is characterized as Q = 10.000 - 40P, where Q is our number of sold products and P is our price. Now a tax on 2 usd is introduced on each sold product which is charged to the companies.
Calculate and illustrate in a diagram the market equilibrium before and after the tax. Calculate the CS, PS and the total surplus by trading on the market before and after the tax.
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