The demand (D) and supply (S) function for a commodity are P=100 - 20 and P= 10 + Q, respectively. (a) Find the equilibrium price and quantity. That is, find the price and quantity where the Dand S functions intersect. (b) A new 10% tax is imposed on this commodity. Find the burden of the tax on demanders and the burden on suppliers. Also find the total taxes.
The demand (D) and supply (S) function for a commodity are P=100 - 20 and P= 10 + Q, respectively. (a) Find the equilibrium price and quantity. That is, find the price and quantity where the Dand S functions intersect. (b) A new 10% tax is imposed on this commodity. Find the burden of the tax on demanders and the burden on suppliers. Also find the total taxes.
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter6: Demand And Elasticity
Section: Chapter Questions
Problem 3TY
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