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

Rapid growth of the national debt, He rapid growth of the national debt ala...

He rapid growth of the national debt alarmed some politicians and created pressure for restricting Congress's unlimited ability to spend. Efforts to Reduce the Deficit, discuss the

Define ndp, The following is the information from the national income accou...

The following is the information from the national income accounts for a hypothetical country: GDP

Illustrate biological effects of patulin, Q. Illustrate biological effects ...

Q. Illustrate biological effects of Patulin? Biological activity: Patulin has an acute oral LD 50 in rodents of about 30-50 mg/kg and has been shown to be teratogenic, immunot

National product and domestic product, National Product and Domestic Produc...

National Product and Domestic Product  A modern economy produces literally thousands of different goods and services. Some of these goods and services such as rice, wheat, shir

State about the United States government bonds, State about the unitesd sta...

State about the unitesd state government bonds In most countries, you find government bonds with longer maturity. For example, in the United States you have Treasury notes (two

Define effective exchange rate, Q. Define Effective exchange rate? Supp...

Q. Define Effective exchange rate? Suppose that we are interested in external competitiveness of a country, let's say Japan. To do this we could look at evolution of a particul

Determine the daily amount and ipa, A brewery produces two kinds of beer, s...

A brewery produces two kinds of beer, stout and IPA . Each batch of stout sells for $60 per unit while each batch of IPA sells for $108. Both products require malt, hops, barley, f

Describe wages and income, Q. Describe Wages and income? Remember that ...

Q. Describe Wages and income? Remember that by wage we characteristically mean what you receive for working one hour, whereas income is the total revenue from all sources over

Graph the industry demand and supply, Construct two graphs that exhibit equ...

Construct two graphs that exhibit equilibrium in the petrol market - assume that there are no taxes. Clearly label the equilibrium values. (a) Graph the AFC, AVC, ATC, and MC fu

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