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

Employment population ratio, The employment-population ratio gives the numb...

The employment-population ratio gives the number of people: Select one: a. working. b. working as a percentage of the number of people available to work. c. in the labor force.

Exante real interest rate, The exante real interest rate is based on _____ ...

The exante real interest rate is based on _____ inflation, while the ex post real interest rate is based on _____ inflation. A) expected; actual B) core; actual C) actual;

Determine the categories of finished goods, Determine the categories of fin...

Determine the categories of finished goods Finished goods in the goods market are divided into 4 categories: private consumption going to private sector, public consumption for

Probability of being dealt any two cards greater, 1) Suppose you are dealt ...

1) Suppose you are dealt two cards from a standard deck of playing cards. a) What is the probability of being dealt a pair of aces? b)There are 13 possible pairs possible (Ac

Illustrate an example of consumer price index, Illustrate an example of Con...

Illustrate an example of Consumer Price Index For instance, if we spend twice as much on apples as on pears, apples would have twice the weight in basket. The precise details o

Illustrate website of at least 3 of the companies, Review the most current ...

Review the most current results of FORTUNE Magazine's annual ranking of America's "100 Best Companies to Work For." Explore the website of at least three of the companies noted. De

Money illusion, A significant argument for the augmentation has to do with ...

A significant argument for the augmentation has to do with concept of money illusion. Money illusion means that you care about nominal rather than real amounts. Imagine that your s

Consumer Price Index, What is the formula for consumer price index?

What is the formula for consumer price index?

Discuss about the keynesian economists, Discuss about the Keynesian economi...

Discuss about the Keynesian economists The Keynesian economist A. W. Phillips developed short-run Phillips curve analysis in the 1950s. Phillips had researched the relationshi

Define the monopoly of central banks, Define the monopoly of Central banks ...

Define the monopoly of Central banks The central bank has a monopoly on issuing currency, it is in complete control of the monetary base. In section 7.4.2 we will describe exac

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