Question
Suppose the weekly demand for a certain good in thousands of units, is given by the equation P = 32 - Q , and the
Suppose the weekly demand for a certain good in thousands of units, is given by the equationP= 32 -Q, and the weekly supply curve of the good by the equationP= 4 +Qwhere 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.
Note:If necessary round your answers to two decimal places.
b)What is the equilibrium price before the tax?
c)What is the Consumer and Producer Surplus before the tax?
d) What is the new Consumer and Producer surplus after the tax is imposed?
e)How much government revenue will this tax generate a week?
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