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Suppose the demand and supply curves for electric scooters in a city are as follows, where p is in $ and Q is in thousands
Suppose the demand and supply curves for electric scooters in a city are as follows, where p is in $ and Q is in thousands of scooters per year:
QD= 12,500 - 2pBQS= 2,500 + 8pS
- Calculate market equilibrium p*:$
- Calculate market equilibrium Q*:
- Calculate the price elasticity of demand at the equilibrium:
Suppose the city introduces a tax of $125 per scooter to discourage scooter congestion, collected from the sellers:
- Calculate net-of-tax equilibrium price paid by buyers: $
- Calculate net-of-tax equilibrium price received by sellers: $
- Calculate after-tax equilibrium quantity:
- Of the $125 tax, how much is paid by buyers?: $
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