Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please don't copy existing solutions, these are wrong. The elasticity of demand for home computers is -2.5, the elasticity of demand for business computers is

Please don't copy existing solutions, these are wrong.

The elasticity of demand for home computers is -2.5, the elasticity of demand for business computers is -.90, and the elasticity of supply for computers for both purposes is

1. a.A per-unit tax of $200 is imposed on the suppliers of computers. How much does the gross price increase in each market? [Hint: first find the tax incidence/shares.]

b.Suppose the untaxed market equilibrium price and quantity in the home computer market are $850 and 10 million, respectively. In the business market, the untaxed market equilibrium price and quantity are $1200 and 15 million, respectively. What is the deadweight loss of the $200 tax?

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_2

Step: 3

blur-text-image_3

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

Green Jobs For Sustainable Development

Authors: Ana Maria Boromisa, Sanja Tišma

1st Edition

131775185X, 9781317751854

More Books

Students also viewed these Economics questions

Question

Where do your students find employment?

Answered: 1 week ago

Question

1. Why do we trust one type of information more than another?

Answered: 1 week ago