The demand and supply curves are given by q = 80 - 4 p and q = 6 p-40, respectively; the equilibrium price is $12 and the equilibrium quantity is 32 units. A sales tax of 7% is imposed on the consumer. (a) Find the equation of the new demand and supply curves. NOTE: Enter the exact answer. Demand: q = Supply: q = (b) Find the new equilibrium price and quantity. NOTE: Round your answers to two decimal places. P = $ Total tax collected = q= (c) How much is paid in taxes on each unit? How much of this is paid by the consumer and how much by the producer? NOTE: Round your answers to two decimal places. Tax paid by consumer = $ Tax paid by producer = $ Total tax paid = $ (d) How much tax does the government collect? NOTE: Round your answers to two decimal places. $ units.

The demand and supply curves are given by q = 80 - 4 p and q = 6 p-40, respectively; the equilibrium price is $12 and the equilibrium quantity is 32 units. A sales tax of 7% is imposed on the consumer. (a) Find the equation of the new demand and supply curves. NOTE: Enter the exact answer. Demand: q = Supply: q = (b) Find the new equilibrium price and quantity. NOTE: Round your answers to two decimal places. P = $ Total tax collected = q= (c) How much is paid in taxes on each unit? How much of this is paid by the consumer and how much by the producer? NOTE: Round your answers to two decimal places. Tax paid by consumer = $ Tax paid by producer = $ Total tax paid = $ (d) How much tax does the government collect? NOTE: Round your answers to two decimal places. $ units.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter5: Markets In Motion And Price Controls

Section: Chapter Questions

Problem 10P

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