Suppose the market for a good is described by the following equations: Qa60-3P and Qs = -20+5P 1. If the government asks the supplier to pay a 20% GST for every transaction: • What is the new supply and demand curve? • What is the new equilibrium of price paid by the consumers to producers? What is the new equilibrium quantity? How much is the total tax collected?

Suppose the market for a good is described by the following equations: Qa60-3P and Qs = -20+5P 1. If the government asks the supplier to pay a 20% GST for every transaction: • What is the new supply and demand curve? • What is the new equilibrium of price paid by the consumers to producers? What is the new equilibrium quantity? How much is the total tax collected?

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Application: The Cost Of Taxation

Section: Chapter Questions

Problem 10PA

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