Wednesday
April 1, 2015

Homework Help: math

Posted by tony on Thursday, June 20, 2013 at 4:05pm.

Market price with no tax is where supply equals demand, so at $7.
b) The two dollar tax is reflected in the price that people have topay, but it does not give a firm extra income. For instance, pricewas $7 in part a. Now with the tax, people pay $9, but the firmonly earns $7. So the firm wants to sell 125, and consumers onlywant to buy 75. So basically, you look for where quantity demandedequals quantity supplied at a price level 2 dollars higher for theconsumers. Here it is $8. The firm earns 6 of that 8, so they wantto supply 100, and people demand 100 at a price of $8. Quantityequals 100.
c) Each side picks up one dollar of the tax; the firm used to make7 dollars per unit and now only makes six, and the consumer used topay 7 dollars and now they pay 8.

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

Economics - There are 10 identical consumers whose demand is D: p = 20 - 10q. ...
economy - consider a perfectly competitive market in which all firms have the ...
Economic - The market for Good X can be depicted with the following demand and ...
Economics - One supply-side measure introduced by the Reagan administration was ...
Economics~~URGENT!!! - i am not a spoon feeder, i just dont have any idea about ...
Economic - Cost and benefit analysis - i am not a spoon feeder, i just dont have...
supply and demand - -what happens if a shortage of a product currently exists in...
economics - Q AC MC 1 4 12 2 8 20 3 12 28 4 16 36 5 20 44 6 24 52 7 28 60 8 32 ...
home economics - illustrate each policy in a supply and demand digram of the gun...
economic - ASSIGNMENT 5: DUE 4.00PM, 4/09/08 1. A competitive firm uses coal to ...

Members