(a) Suppose in a competitive market, the market demand curve for salt is infinitelyinelastic. What is the impact of a per-unit tax (i.e. a specific tax) on the priceof salt that consumers pay? Suppose the demand curve for butter is Q = 50 − 3P and the supply curve isQ = 2P. Suppose the government announces a per-unit tax of 1 on the priceof butter. Tax on butter can be seen as a ’fat tax’. What is the overall effectof a fat tax on the consumers? Please do not use chat gpt and answer the best way it can be.
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(a) Suppose in a competitive market, the market demand curve for salt is infinitely
inelastic. What is the impact of a per-unit tax (i.e. a specific tax) on the price
of salt that consumers pay? Suppose the demand curve for butter is Q = 50 − 3P and the supply curve is
Q = 2P. Suppose the government announces a per-unit tax of 1 on the price
of butter. Tax on butter can be seen as a ’fat tax’. What is the overall effect
of a fat tax on the consumers?
Please do not use chat gpt and answer the best way it can be.
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- The demand and supply equations for a product are: Q^d=300-6p and Q^x=-40+6p. . Determine the market Equilibrium and draw graphs. Suppose that the government decides to impose a flat tax of 10% on each unit sold. Show that the price that consumers pay would be the same if the government imposed a tax of Rs. 1.70 per unit sold. Draw graph and explain . Also calculate the total revenue earned by sellers before and after the tax, the tax revenue raised by the government, changes in consumer and producers surplus and dead weight lossSuppose that demand for gasoline is 0.5 (Ed=0.5) and the supply of gasoline pizza is 1.25 (E, = 1.25). If the government imposes a $1 per gallon excise tax on the production of gasoline, then the price that consumers pay will and the price that producers receive will O increase by more than $0.50; decrease by more than $0.50. O increase by more than $0.50, but less than $1; increase by more than $0.50, but less than $1. increase by more than $0.50, but less than $1; decrease by less than $0.50. decrease by more than $0.50, but less than $1; increase by less than $0.50. increase by less than $0.50; decrease by more than $0.50, but less than $1.Don't use chatgpt and make sure you include the graphs needed (a) Suppose in a competitive market, the market demand curve for salt is infinitelyinelastic. What is the impact of a per-unit tax (i.e. a specific tax) on the priceof salt that consumers pay?(b) Suppose the demand curve for butter is Q = 50 − 3P and the supply curve isQ = 2P. Suppose the government announces a per-unit tax of 1 on the priceof butter. Tax on butter can be seen as a ’fat tax’. What is the overall effectof a fat tax on the consumers? (c) If you were a policymaker and wanted to promote a fat tax in the UK, whatwould you cover in your policy campaign?
- The demand and supply equations for a product are: Q* = 0.2 300 – 6P and Q' = -40 + 6P. Determine the market equilibrium and draw graphs. Suppose that the government decides to impose a flat tax of 10% on each unit sold. Show that the price that consumers pay would be the same if the government imposed a tax of Rs. 1.70 per unit sold. Draw graphs and explain. Also calculate the total revenue earned by sellers before and after the tax, the tax revenue raised by the government, changes in consumer and producers surplus and dead weight loss.Suppose that in a certain market the demand function for a product is given by p =−8q + 2800 and the supply function is given by p = 3q + 45. Then a tax of $5 per itemis levied on the supplier, who passes it on to the consumer as a price increase. Findthe equilibrium price and quantity after the tax is levied.Suppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.8 and 0.7 respectively. Suppose the government imposes a per-unit tax of $45 on the cigarette sellers. By how much would buyers share the tax burden respectively? Show your calculation.
- Refer to the graph shown. Assume the market is initially in equilibrium at point j in the graph but the imposition of a per-unit tax on this product shifts the supply curve up from SO to S1. The amount of revenue the government will collect from this tax is equal to the area of: Price a b C 9 O O rectangle chie. triangle ach. O triangle egi. O rectangle bkjd. h E # k $1 SO Demand Wy QuantityThe market for skateboards currently has no taxes. The equilibrium quantity is 5,000/month, and the equilibrium price is $40. The governor is considering placing a $10/skateboard tax on skateboard producers, and expects to raise $50,o00/month in revenue. Is the governor correct? O Yes, because producer and consumer responses will cancel out. O No, because the quantity produced and consumed will fall below 5,000/month once the tax is imposed. O No, because it doesn't matter whether the consumer or producer is taxed. O Yes, because 5,000 x $1O = $50,000.The demand and supply equations for a product are: Q= 300 — 6P and Q.= -40 + 6P. Determine the market equilibrium and draw graphs. Suppose that the government decides to impose a flat tax of 10% on each unit sold. Show that the price that consumers pay would be the same if the government imposed a tax of Rs. 1.70 per unit sold. Draw graphs and Also calculate the total revenue earned by sellers before and after the tax, the tax revenue raised by the government, changes in consumer and producer surplus, and deadweight loss.
- Suppose you are given the following information: Qs = 100 + 3P Qd = 400 – 2P where Qsis the quantity supplied, Qdis the quantity demanded and P is price. 1. Now suppose that a tax is placed on buyers so that Qd = 400 – (2P + T) where T istaxes. If T = 15, solve for the new equilibrium price and quantity. (Note: You aresolving for the equilibrium price for sellers and buyers)The demand and supply equations for a product are: Qd = 300 - 6P and Qs = -40 + 6P. Determine the market equilibrium and draw graphs. Suppose that the government decides to impose a flat tax of 10% on each unit sold. Show that the price that consumer pay would be the same if the government imposed a tax of Rs. 1.70 per unit sold. Draw graphs and explain. Also calculate the total revenue earned by sellers before and after the tax, the tax revenue raised by the government, changes in consumer and producers surplus and dead weight loss.The demand and supply equations for a product are: Qd= 300 — 6P and Qs= -40 + 6P. Determine the market equilibrium and draw graphs. Suppose that the government decides to impose a flat tax of 10% on each unit sold. Show that the price that consumers pay would be the same if the government imposed a tax of Rs. 1.70 per unit sold. Draw graphs and explain. Also calculate the total revenue earned by sellers before and after the tax, the tax revenue raised by the government, changes in consumer and producers surplus, and deadweight loss