Find equilibrium price before and after tax is implemented

Assignment Help Microeconomics
Reference no: EM13914697

To meet its commitments under the Montreal Protocol, the United States implemented certain market-based policy instruments, including an excise tax on ozone depleters. Consider the following market for CFC-12 before the excise tax is imposed, where P is price per pound.

Demand : Q ¼ 18:40 - 0:5P Supply : Q ¼ 10:00 þ 2:5P

Now assume that a 60 cent excise tax is used, which shifts the supply curve to Q′ = 8.50 + 2.5P.

a. Find the equilibrium price before and after the tax is implemented.

b. What do you conclude about who bears the primary burden of the tax-buyers or sellers? Briefly explain the economic sense of this out- come in this particular context.

Reference no: EM13914697

Questions Cloud

Describe some way that u.s. gaap and ifrs are different : Describe some way that U.S. GAAP and IFRS are different.
Future of managed health care delivery systems : This assignment is designed to guide you as you start your research for the Future of Managed Health Care Delivery Systems. Use eight to ten scholarly and/ or peer-reviewed sources and the following guide as you write your proposal and bibliogr..
Prepare journal entry to record cost of cell phones replaced : Prepare journal entries to record (a) the cost of cell phones replaced under warranty and (b) the estimated liability for product warranties for cell phones sold during the month.
Determining the effect of errors on the trial balance : Explain how each of the following posting errors affects a trial balance. State whether the trial balance will be out of balance because of the posting error, and indicate which side of the trial balance will have a higher amount after each independe..
Find equilibrium price before and after tax is implemented : What do you conclude about who bears the primary burden of the tax-buyers or sellers? Briefly explain the economic sense of this out- come in this particular context.
Calculate price with constant dividend growth model : Sisters Corp expects to earn $6 per share next year. The firm’s ROE is 15% and its plowback ratio is 60%. If the firm’s market capitalization rate is 10%. Calculate the price with the constant dividend growth model. What is the present value of its g..
Perspective of american colonists : According to the British King and bureaucracy, the colonists were acting like spoiled children. According to the colonists, the British were overbearing, over-taxing, and ignoring their grievances. Take the perspective of American colonists, and e..
Group performance through use of established criteria : Assess individual and group performance through use of established criteria for student mastery (including rubrics) in order to plan lessons to meet pupils' requirements in every capacity of progress (cognitive, linguistic, social, emotional, and ..
Decide between two different conveyor belt systems : Lang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System A costs $212,000, has a four-year life, and requires $68,000 in pretax annual operating costs. Calculate the EAC for both conveyor belt sys..

Reviews

Write a Review

Microeconomics Questions & Answers

  What will affect total expenditures on fresh tomatoes

The price elasticity of demand for fresh tomatoes has beenestimated to be -2.22. If a new insecticide and fertilizertreatment yields a 20percent increase in the nation's fresh tomatocrop, how will that affect total expenditures on fresh tomatoes

  Which is an average annual rate of growth of personal income

This is an average annual tuition increase of 6.5% at public institutions and 7.0% at private institutions. Over the same time, average personal income after taxes rose from $6,517 to $33,705 per year, which is an average annu- al rate of growth..

  Find all nash equilibria in pure strategies

Find all Nash equilibria in pure strategies and what is the Pareto Optimal outcome under collusion? Show that this outcome is not sustainable.

  Exhibit anbsp demand and marginal utilitypizza

exhibit anbsp demand and marginal utilitypizza piesnbspnbspnbspnbsp compact disksnbspnbspnbspnbsp nbsp moviestotal

  What effect must this have on nco in your country how did

we have established a relationship between net capital outflow nco and the trade balance net exports. during this

  What is a market economy

How is socialism different from capitalism? Define the terms opportunity cost, scarcity, and resources. Please describe in detail an example of how each of these concepts have affected or currently affect your life.

  Review the conservative and liberal views of poverty

Review the conservative and liberal views of poverty - What is your own view on poverty? Do you consider your view to lean towards the liberal or conservative view of poverty?

  What do the indifference curves look like

Assume an economy where both agents see the goods as perfect compliments at a ratio of one to one. What do the indifference curves look like? Assume an equal supply of each good.

  Rate of return on real estate investment

You purchased a piece of property at $360,000 five years ago. You can sell the property at $450,000. What is the rate of return on real estate investment?

  Perceptions of friendliness by small business the 2013

perceptions of friendliness by small business the 2013 thumbtack.com survey the 2013 thumbtack.com survey provides a

  How do fixed costs play a role in your analysis

Say you are the manager of a perfectly competitive firm selling a product. Your business is making a loss because total revenue is less than total costs. What would you do--shut down or continue to operate? How do fixed costs play a role in your an..

  Comparing the size of economies to the gdp of the us

What specific standard is applied to a firm whose only contact with a forum state is through its Internet site? If you had an eBusiness, what could you do in order to limit your liability to suit in multiple jurisdictions?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd