Solve equilibrium price and the equilibrium quantity, Macroeconomics

Suppose that a widget market is described by the following supply and demand equations.

Supply: Q = 3P

Demand: Q=400 - P

a. Solve for the equilibrium price and the equilibrium quantity.

b. Assume that a tax of t is placed on consumers, so the new demand equation is

Demand: Q=400 - (P + t)

Solve for the new equilibrium. What happens to the price received by suppliers, the price paid by consumers, and the quantity sold?

c. The local government's tax revenue is t x Q. Use your answer to the part (b) to solve for tax revenue as a function of t. Government's tax revenue is t x Q. Use your answer to the part (b) to solve for tax revenue as a function of t. Graph this relationship for t between 0 and 400.

d. The local government now imposes a tax on this good of $300 per

 

Posted Date: 3/13/2013 2:29:41 AM | Location : United States







Related Discussions:- Solve equilibrium price and the equilibrium quantity, Assignment Help, Ask Question on Solve equilibrium price and the equilibrium quantity, Get Answer, Expert's Help, Solve equilibrium price and the equilibrium quantity Discussions

Write discussion on Solve equilibrium price and the equilibrium quantity
Your posts are moderated
Related Questions

Determine the categories of finished goods Finished goods in the goods market are divided into 4 categories: private consumption going to private sector, public consumption for

If a social entrepreneur is relying on contributions, are there not risks in being accountable and using that money wisely?

different determinants of propensity to consume

Provide an example of a decision in which you faced trade-offs, considered opportunity costs and evaluated the options by comparing the marginal benefits and the marginal costs ass

Relationship between the interest rate and the bond price Note that the higher the issue price, the lower the interest rate. Similarly when the price of a government bond incr

Write a one paragraph summary and three paragraphs that take the information in the article and relate it specifically to the circular flow model and the supply and demand curves.

How growth are improved living standards The two main benefits of growth are improved living standards and technological advancement. As an economy grows, the output of

A monopoly is broken into a number of competitive parts. Predict the changes in output and price which are likely to take place. Making the basic assumptions that,  1) The i

Evaluate the impact of an aging population on state and local government expenditures. Suggest strategies that government should take in dealing with this situation. Justify your r