Question
The market for Shiba dogs in Japan is described by different equations . QD = 15 - P and QS = -5 + 4P. (A)
The market for Shiba dogs in Japan is described by different equations . QD = 15 - P and QS = -5 + 4P.
(A) Find the equilibrium price and quantity. Show your work.
(B) Suppose a $5 tax is imposed on the sale of Shiba dogs. What is the new quantity sold? How much tax revenue does the government raise? How much do consumers pay (including the tax)? What is the DWL? Show enough work to explain how you found your numbers
(C) The economists conducting this study found this surprising because they thought that there are many breeds of dogs that functions as good substitutes for Shibas. In economic terms what did they believe? What did they believe about the tax incidence as a result?
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Business Statistics for Contemporary Decision Making
Authors: Ken Black
6th Edition
978-0470409015, 9780470559062, 470409010, 470559063, 978-0470910184
