Calculate total market surplus before tax applied

Assignment Help Business Economics

Reference no: EM131094542

Continue to consider the market in which the supply and demand curves are described by the following information:

Vertical intercept for the supply curve: -120 (NEGATIVE 120)

Vertical intercept for the demand curve: 200

P*: $80

Q*: 600

A tax is applied to the market in the amount of $32 per unit. With the tax, sellers now receive a price of $60 per unit sold. You will have to calculate the price paid by buyers - but you have enough information to do so. With the tax, 540 units are sold.

Carefully following all numeric instructions, calculate total market surplus before (without) the tax applied.

Price Paid by buyers with tax-92

Market tax revenue- 17280

Reference no: EM131094542

Questions Cloud

Attractiveness of investments based internal rate of return : Aerotron Electronics is considering the purchase of a water filtration system to assist in circuit board manufacturing. The system costs $40,000. What is the internal rate of return of this investment? What is the decision rule for judging the attrac..

Increase government spending by building more libraries : Suppose that the president has decided to increase government spending by building more libraries. The legislation was rushed through Congress and enacted without any delay. From here, the libraries will take 10 months to plan and 2 years to build. W..

Welcomes continued strengths in the exchange value : The exchange rate of the $ has increased by 20% or more against the currencies of major US trading partners during the past year. Do you think the Fed welcomes continued strengths in the exchange value of the $ at this time? Explain your answer caref..

When fiscal policy is used to manage the economy : When fiscal policy is used to manage the economy, there are a number of factors that can delay its impact. Which of the following is an example of a recognition lag?

Calculate total market surplus before tax applied : Continue to consider the market in which the supply and demand curves are described by the following information: A tax is applied to the market in the amount of $32 per unit. With the tax, sellers now receive a price of $60 per unit sold. You will h..

Government has implemented industrial policies : Select a country in which the government has implemented industrial policies. Have the industrial policies contributed significantly to the country’s economic growth? Have the policies lead to problems in the country’s economy?

Producer surplus-single-price monopolist to maximize profits : Examine the table Turkeys. Trader Tom is a monopolist that sells fried turkeys for Thanks giving dinner for a constant marginal and average cost of $10 per turkey. Assume that Tom has no fixed cost. Tom has 6 potential customers, each of which will b..

What is the law of diminishing returns : What is the law of diminishing returns? Can you give an example of when diminishing returns have set in (could set in) at the place you work/would like to work? What is the difference between economic profits and accounting profits? Can you give exam..

Hope of matching efficiency of competitive pricing system : According to Hayek, a social planner has no hope of matching the efficiency of a competitive pricing system because

User Account

All Pages