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

Determine the example of currency inside banks is not money, Determine the ...

Determine the example of Currency inside banks is not money An example may also illustrate this important fact: Eric has 100 euro - this amount is obviously part of the

Damaging to the economy, Why do financial crises occur and why are they so ...

Why do financial crises occur and why are they so damaging to the economy?

Determine in detail about money supply of central bank, Determine in detail...

Determine in detail about money supply of Central bank The central bank will not pay cash when it buys government securities. Instead, it will ask the seller's bank to credit t

Credit multiplier, how can the central bank influence the size of the multi...

how can the central bank influence the size of the multiplier

Decrease the nominal deficit, Which of the following will decrease the nomi...

Which of the following will decrease the nominal deficit? A. An increase in taxes. B. An increase in the debt. C. An increase in government expenditures. D. An increase in interest

Single nonprofit provider, For a single nonprofit provider, describe an out...

For a single nonprofit provider, describe an output-maximizing model to predict supplier behavior.

Firm maximizing profit, A firm with two factories, one in Michigan and one ...

A firm with two factories, one in Michigan and one in Texas, has decided that it should produce a total of 500 units to maximize profit. The firm is currently producing 200 units i

Price of beer to increase by 10 percent, A recent article estimated that th...

A recent article estimated that the elasticity of the rate of gonorrhea with respect to the price of beer is about 0.8. If this estimate is correct, are unprotected sex and beer su

Change in nominal gdp, By given scenario answer the following questions. ...

By given scenario answer the following questions. 1. What phase of the business cycle is the economy? 2. If inflation increased by 5% during the same period, what was the cha

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