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

Economic concepts models- demand/supply concepts, Questions: ...

Questions: Search through newspapers for ONE article that is relevant to the economics concepts. You are also required to attach the article to your final report

Expect to affect economic growth and wealth, Despite the economic progress ...

Despite the economic progress that the U.S. has observed in the past century, the standard of living remains extremely low in many countries. Why are some countries relatively weal

neumann-morgenstern utility index- risk premium, Question 1 Consider an...

Question 1 Consider an investor who has the von Neumann-Morgenstern utility index u(x ) = 3 + 4√ x An investment provides income according to two possible future scenari

Are credit cards, It is sometimes asked whether credit cards are money sinc...

It is sometimes asked whether credit cards are money since many purchases are made using these. Credit cards are a means of obtaining credit and using this to finance expenditure,

Critique the effectiveness of the model, Discuss how decisions are made in ...

Discuss how decisions are made in your workgroup. Which model is used for what situation? Be sure to provide specific examples of at least three situations and what model was used

Var model, The estimated statistics from the VAR model are not able to be i...

The estimated statistics from the VAR model are not able to be interpreted to solve the problem of this coursework due to reasons that are discussed in the next subchapter. Therefo

Explain about price inflation, Q. Explain about Price Inflation? The ma...

Q. Explain about Price Inflation? The major reason for allowing for non-constant wages in the model is that we then can allow for persistent deflation/inflation. With constant

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