ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
expand_more
expand_more
format_list_bulleted
Question
When the
When the price is 9,5 TL for each pack of cookies, the supply is 200 thousand and the demand is 240 thousand boxes.
Since the price-demand and supply-demand equations are linear;
If a tax is applied to the consumer at the rate of T=0.75 TL per product, find and interpret the market balance point after tax.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by stepSolved in 3 steps with 17 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Suppose that a lumber-producing firm had a demand for the ability to burn sawdust given by: Q = 90- P. Where Q is amount of sawdust burned when the firm has to pay price (P) per unit of sawdust burned. Calculate the quantity of sawdust burned if there is a per unit tax of $26 per unit of sawdust burned. (Do not include a $ sign in your response. Round to the nearest 2 decimal places if necessary.) Answer: Checkarrow_forwardAlgebraically, solve for the after tax equilibrium price and quantity in the corn market, if the government collects a specific tax of t=$2.40 from customers. The before-tax linear demand function for U.S. corn is given as Q=15.6-0.5p and the original supply curve is given as Q=9.6+0.25p. Please show with a diagram.arrow_forwardDoyle and Samphantharak (2008) find that when a 5% gas tax is implemented, prices consumers pay for gas increase by about 4%. What role does demand elasticity play in determining the size of this price change? That is, under what demand elasticity cases would the price change be closer to 5%, or closer to 0%? Illustrate and explain using supply-and-demand graph(s)..arrow_forward
- How much would the excess burden of this $12 tax be if the equation of the original supply curve had been: Supply: P = 40 +0.2Q? A) $80 B) $120 C) $140 D) $360arrow_forwardOregon Hikes Cigarette Tax by $2 Last November Oregon voters overwhelmingly approved higher taxes on cigarettes and a new tax on e-cigarettes. Effective January 1, 2021, the state tax on a pack of cigarettes jumped from $1.33 to $3.33, the sixth-highest state tax in the nation. That will bring the average retail price up to $8.33 a pack, almost a 32 percent increase. State officials are expecting a tax windfall of $135 million in 2021 from the higher taxes. That assumes Oregonians continue to buy cigarettes at the same rate. Economists warn, however, that smokers reduce cigarette purchases when prices go up. Typically, unit sales decline by 4 percent when cigarette prices go up by 10 percent. The drop in unit sales may be larger in Oregon, as residents will have the option of purchasing smokes from other states, Indian reservations, and online. Source: Media reports of November 2020–February 2021. According to the News Wire, Instructions: Round your responses to one decimal…arrow_forwardSuppose an additional "special" tax of $0.10 per litre is imposed on the sale of gasoline in one province. Prior to the tax the price was $1.30 per litre and 10 million litres of gasoline are sold per day. After imposition of the tax, the new equilibrium price and quantity are $1.38 per litre and 9.6 million litres per day. What is the direct burden of this "special" tax?arrow_forward
- Consider an ad-valorem tax on a good X. The Demand for good X is constant elasticity with elasticity -2. The Supply for good Y is constant elasticity with elasticity 3. Consider the same setting as for the previous question. When a tax of 1% of the price is imposed on good X, then equilibrium quantity of X exchanged declines by what percentage?arrow_forwardi. The elasticity of demand for beer in country A is 1.8 and the elasticity of demand for beer in country B is 1.7. Suppose that the supply of beer is the same in both countries and that both countries impose the same level of tax on beer. Does the consumer in country A share more burden of tax? Suppose the demand curve for sugar is Q = 60-3P and the supply curve is Q=2P. Suppose the government announces a per-unit tax of 1 on the price of sugar. What is the deadweight loss from the tax? Why do you think a policymaker and a consumer might interpret this deadweight loss differently?arrow_forwardSuppose that the equilibrium quantity in the market for gadgets has been 85,000 per month. Then a tax of $6 per gadget is imposed on gadgets. As a result, the price paid by buyers increases by $4 and the after-tax price received (and kept) by sellers falls by $2. Given this tax imposition, the government is able to raise $481,740 per month in tax revenue. We can conclude that the imposition of the tax (x) has caused a deadweight loss by an amount more than $13,750 but less than $14,500 per month. (y) has reduced the equilibrium quantity of gadgets by more than 4,450 but less than 4,675 gadgets per month. (z) has reduced consumer surplus by more than $328,750 per month and has reduced producer surplus by more than $164,775 per month.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education