Solve equilibrium price and the equilibrium quantity, Macroeconomics

Assignment Help:

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

 


Related Discussions:- Solve equilibrium price and the equilibrium quantity

What are the two main costs of economic growth, What are the two main costs...

What are the two main costs of economic growth The two main costs of economic growth are resource depletion and environmental damage. Economic activity needs factor inp

Externalies, how does government regulate externalies

how does government regulate externalies

Give examples of a monopoly, Give examples of a monopoly and an example of ...

Give examples of a monopoly and an example of perfect competition. Explain how each of your examples matches the textbook's definition of that market structure. Monopoly-a firm tha

Name two strategies is most likely to lead to development, Explain which of...

Explain which of the two strategies is most likely to lead to development. Empirically, it seems rather evident that export-orientation has been more successful than import-sub

Quantity theory of money, what is the importance of the quantity theory of ...

what is the importance of the quantity theory of money

Elucidate own small building company, You operate your own small building c...

You operate your own small building company and have decided to bid on a government contract to build a pedestrian walkway in a national park during the coming winter. The walkway

Describe in detail about exchange rate systems, Describe in detail about Ex...

Describe in detail about Exchange rate systems Various countries have different exchange rate systems. The most significant characteristic of an exchange rate system is to what

Long run imports will most likely be paid, In the long run, imports will mo...

In the long run, imports will most likely be paid for with: a. Aexports. b. The sale of real and financial assets. c. the extension of credit. d. higher domestic unempl

Write Your Message!

Captcha
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