Question
Suppose a competitive market has the following demand function and supply function: Qd = 200 - 2P Qs = 20 + 3P a) Determine the
Suppose a competitive market has the following demand function and supply function:
Qd = 200 - 2P
Qs = 20 + 3P
a) Determine the equilibrium price and quantity in this market.
b) Suppose the government imposes a per-unit tax of $4 on producers. Determine the new equilibrium price and quantity, the amount of tax revenue collected by the government, and the deadweight loss of the tax.
c) Suppose instead that the government imposes a lump-sum tax of $400 on producers. Determine the new equilibrium price and quantity, the amount of tax revenue collected by the government, and the deadweight loss of the tax.
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Mathematical Applications for the Management Life and Social Sciences
Authors: Ronald J. Harshbarger, James J. Reynolds
11th edition
9781337032247, 9781305465183, 1305108043, 1337032247, 1305465180, 978-1305108042
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