The firms in a perfectly competitive market for a good create pollution, the costs of which do not enterinto the firms' costs. The government decides to impose a domestic Pigovian tax, t, as a way ofaddressing this problem. Figure 11 shows this scenario.PriceP1P2P3MC5MCp+tMC-SDQ1Q2 03QuantityFigure 11: A Pigovian tax on suppliersBased on Figure 11, select the correct answer to match this description:The quantity demanded after the tax is implementeda. Q1○ b. Q₂○ C. Q3

Answer: Initially ,before imposing domestic pigovian tax the firm was in equilibirium at price P2…

Answered: The firms in a perfectly competitive…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Add comments, discussion or calculations to your PART TWO document as directed. The market demand and supply curves for Quebec maple syrup are given by Qd = 2000 – 45P Q, = 35P+ 1000 where the quantities Q are in 1000s of gallons per year. The government of Quebec, seeking additional revenue sources, imposes a $2 per gallon tax on all maple syrup sold in the province. IN YOUR PART TWO DOCUMENT, your work in calculating the size of the deadweight loss of this tax on the market, and drawing relevant pictures. HERE answer the following question: How much deadweight loss will there be as a result of the tax?
Suppose that in a perfectly competitive market, the demand for Frisbees is given by Q=200-2P and the supply by Q=-70+P. Assume also that we are at an off-equilibrium price at $95. What is the deadweight loss at that particular price? 100 75 150
How can a government subsidy help with the importation of face masks? Please use agraphs to illustrate.
Rank the points (K,L,M,N) according to increasing tax cost on consumers when the government imposes a tax on suppliers.
Assume that a price floor of $320 has been implemented and there are no wasteful quality improvements. What are the total gains from trade (total surplus) with a price floor of $320? Hint: enter your answer as a number only with no $ sign Example: if the answer is $10,000, enter 10,000 2,400
Suppose Home is a small exporter of wheat. At the world price of 100 US dollars per tonne, Home growers export 20 tons of wheat. Now suppose the Home government decides to support its domestic producers with an specific export subsidy of 40 US dollars per tonne. Use Figure 1 to answer the following questions: Figure 1: Supply and Demand for Wheat at Home Home price 140 100 X 10 20 40 50 Supply Demand Quantity (a) Explain why consumer and producer surplus can be used to gauge the change in welfare caused by the export subsidy on individuals and firms.
i will 10 upvotes do fast .
In Figure 1, suppose the marginal value for gasoline falls by $6 for every quantity demanded for all gas stations in the market. Next, assume that the government enacts a price ceiling of $2. What is the loss in consumer surplus? A) $6B) $2C) $12D) There is no consumer welfare loss because prices are lower.E) There is not enough information to calculate.
Subsidies lead to overproduction and overconsumption relative to the competitive equilibrium. What is the deadweight loss associated with this? Why is there a deadweight loss? Depict this in your original figure (see attached), or draw a new figure.
Can you help me with the question below? Refer to Figure 1 for questions 6-11 In Figure 1, S = Market Supply Curve; D = Market Demand Curve. What is consumer surplus at the competitive market equilibrium price and quantity?A) $50B) $40C) $25D) $16E) $8
The market for smart phone applications is characterized by the following demand and supply curves. QD = D(P) = 15 - 3P QS = S(P) = 5 + 10P (a) Calculate the equilibrium price and quantity for this market. (b) The government is considering introducing a per unit subsidy of t on each electric car that is purchased. Suppose that the statutory incidence of this subsidy will be on buyers. Using the equilibrium conditions, D(Pn - t) = S(Pn) = Q* (i.e. that demand equals supply in equilibrium), derive an equation in terms of es and ed that describes what fraction of the subsidy is borne by buyers/consumers. (c) Suppose that the unit tax is set at t = 0.1 per unit. What is the excess burden of this tax per dollar of revenue raised? (d) Suppose that we incorrectly assumed that supply was perfectly elastic and there was no impact of the tax on the equilibrium price received by sellers. Would EB/Tax Revenue be higher or lower than what you calculated in part (c)? In 4 sentences, explain your…
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