What is the demand elasticity at the equilibrium of 2022? What is the supply elasticity? Which one is more elastic? High gas prices have imposed a great burden on consumers. Suppose that the government now wishes to protect consumers by taxing gasoline supply and considers to impose a $0.5 tax per gallon on gas suppliers. What is the equilibrium price and quantity after tax? Calculate the burden of this proposed tax; what percent of the tax would be “paid" by consumers (Round to nearest percent)? How is this related to your answer in part c)?
Assuming a supply function of
Qs = 100+100p
and a
Qd = 700-50p
and an
please answer the following
Given
Supply equation of gasoline: ...... (1)
Demand equation of gasoline: ...... (2)
Here p is the price per gallon and Q is quantity in millions of gallons.
The equilibrium price is $4 per gallon and the equilibrium quantity is 500 million gallons
Price elasticity of demand:
Supply elasticity of demand:
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