na competitive market where the supply price in dollars is determined by p = 3 + 0.25q and the demand price is determined by p = 15 – 0.75q. The government imposes a $4 tax per unit. How much will the price rise for consumers?

na competitive market where the supply price in dollars is determined by p = 3 + 0.25q and the demand price is determined by p = 15 – 0.75q. The government imposes a $4 tax per unit. How much will the price rise for consumers?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

In a competitive market where the supply price in
dollars is determined by p = 3 + 0.25q and the
demand price is determined by p = 15 – 0.75q.
The government imposes a $4 tax per unit.
How much will the price rise for consumers?
What will be the new after tax "per unit revenue"
for firms?
How much money will the government collect in
taxes?

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