Suppose demand is D and supply is S0 so that equilibrium price is $10. If an excise tax of $6 is imposed on this product, what happens to the equilibrium price paid by consumers? The price received by producers? The number of units sold? Equilibrium price paid by consumers: $ Price received by producers: $ Number of units sold:
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Suppose demand is D and supply is S0 so that
Equilibrium price paid by consumers: $
Price received by producers: $
Number of units sold:
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- Suppose the coffee market in the US is given by the following equations for supply and demand: Qs = 9+0.5p Qp = 12 – p where Q is the quantity in millions of tons per year and p is the price per pound. (a) Calculate the equilibrium price and quantity of coffee. (b) At the equilibrium price, what is the price elasticity of demand? (c) Suppose a tax of $0.75 is imposed on coffee producers. Calculate the new equilibrium price and quantity. What is the amount of the tax burden on consumers (hint: by how much has the price per pound consumers pay change?).Suppose demand and supply are given by? = 500-2P and ? =-100+3Pa) Which function is the demand function and why?b) Compute the equilibrium price and quantity in this market?c) Compute the consumer surplus and producer surplus.d) Suppose a GHC 1 exercise tax is imposed on the good. Determine the new equilibrium price and quantity.e) Compute the tax revenue to the government. f) Compute the deadweight loss resulting from the tax.Daily demand for gasoline at a Gas Station is described by Q = 980 - 300p, where Q are gallons of gasoline sold and p is the price in dollars. Gas Station's supply is Q = -2,980 + 3,000p. Suppose the state government places a tax of 18 cents on every gallon of gasoline sold. (a) What are the before-tax and after-tax equilibrium quantities of gasoline Q? (b) What are the changes in consumer's and producer's surplus due to tax? (c) What is the deadweight loss resulting from this tax?
- If a tax of $1.20 is imposed on consumers in this market, what is the tax revenue?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.a) What is the Equilibrium Price and Equilibrium Quantity b) If the government imposes a $15 per unit tax on sellers on this good what is the new quantity sold in units, how much will the buyers pay, how much will sellers receive?, and how much will the government receive in tax revenue? c) What is the price elasticity of demand and over this price change? What about the supply? d) Based on the elasticities calculated above, who will bear a greater burden from the tax? Why?
- Consider the following demand and supply functions:Qd = 80 − 2PQs = −100 + 8P (i) Find the equilibrium price and quantity(ii) Suppose govt. imposes a sales tax of TK.4 per unit, calculate the new equilibrium price and quantity.(iii) Suppose govt. provides subsidy of TK.3 per unit, calculate the new equilibrium price and quantity.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.Suppose demand for good X is given by QD = 900- 1/2P where p is the price and QD the quantity demanded. Supply is given by QS = 1/4P. a) Suppose 60 TL tax is imposed on each unit of X that is purchased. What are the equilibrium price and quantity of X after the tax is imposed?
- Cocoa (Cacao) beans and imported from South America. The government has decided to increase the tax on imported goods such as cocoa. What effect would this have on the market for hot cocoa?Suppose that the government has a goal to reduce the demand for cigarettes in support of a health program. Given this, the government decided to impose a per-unit tax of 40 centavos per pack that is levied on the sellers or placed on the sale of cigarettes by the government. This causes a shift of the market supply of cigarettes from S to S' as shown. Price ($ per pack) S 1.50 1.40 1.30 1.15 D₂ Quantity (Millions of pack) 3 4 5 Answer the following questions regarding this case. 1. Determine the deadweight loss to society caused by the imposition of the tax. (3 points) Interpret the result. (3 points) 1 2. What tax revenue is expected to be collected by the government? (4 points) 1.25 + 1 1 D₁The 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