Market achieves the new market equilibrium

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Reference no: EM131386352

Consider a perfectly competitive market described by the per-period supply function P = 20 + 0.3Q and per-period demand function P = 120 - 0.2Q. If the government intervenes in the market and imposes upon firms a specific tax of t = $5 per unit of output sold, then once the market achieves the new (regulated) market equilibrium:

$725 in tax revenues will be generated each period

$950 in tax revenues will be generated each period

$1000 in tax revenues will be generated each period

$2780 in tax revenues will be generated each period

$3610 of consumer surplus will be generated

Reference no: EM131386352

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