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Analyze the effects on the equlibrium quantity

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Reference no: EM131220313

Consider the competitive market where demand is P=20-.25Q and supply is P=3+.5Q.

a) Analyze the effects on the equlibrium quantity, producer price Pn, and consumer price Pg of a $1 per unit tax on producers. What is the tax revenue?

b) Analyze the effects on the equlibrium quantity, producer price Pn, and consumer price Pg of a 20% ad valorem tax on producers. What is the tax revenue?

c) Analyze the effects on the equlibrium quantity, producer price Pn, and consumer price Pg of a $1 per unit subsidy to consumers. What is the cost to the government?

Reference no: EM131220313

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