Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please help Note: If necessary round your answers to two decimal places. Suppose the weekly demand for a certain good in thousands of units, is
Please help
Note: If necessary round your answers to two decimal places. Suppose the weekly demand for a certain good in thousands of units, is given by the equation P = 37 - 2Q, and the weekly supply curve of the good by the equation P = 13 + Q where P is the price in dollars. Finally, suppose a per-unit tax of $18, to be collected from sellers is imposed in this market. Complete the following questions. ) Graph the weekly demand, supply (pre-tax), and supply (post-tax) equations. . Supply Curve (without tax) Supply Curve (without tax) Demand Curve Supply Curve (with tax) Price ($) 2 8 10 12 14 16 18 Reset Quantity (thousands of units/week) b) What is the equilibrium price before the tax? Equilibrium Price = $0 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 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 e) How much government revenue will this tax generate a week? Note: Remember that the quantity of units on the graph are in thousands. Government Revenue = $0 per week
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started