Question 6A Given the following information: Demand: Qd = 200 5P Supply: Qs = 5P If
Question:
Question 6A
Given the following information:
Demand: Qd = 200 – 5P
Supply: Qs = 5P
If a quantity tax of $2 per unit sold is imposed,
(a) Considering that the government will earn revenue, overall, do you think that society benefits from such a move Yes or no and why? Explain also effect on Buyer Price? Effect on Seller Price? Effects on Quantity traded?
Question 6b
Given the following information:
Demand: Qd = 200 – 5P
Supply: Qs = 5P
If a quantity tax of $2 per unit sold is imposed,
(i)Equilibrium price before the tax
(ii) Equilibrium quantity before the tax
Calculate:
(6c) Demand and Supply equation after the tax.
Demand equation? Supply equation?
6D
(I)Buyer's price after tax?
(ii) Seller's price after tax?
Question 6e
Given the following information:
Demand: Qd = 200 – 5P
Supply: Qs = 5P
If a quantity tax of $2 per unit sold is imposed,
Calculate:
(e) Quantity after tax ?
(f) Tax revenue?
(g) Deadweight loss of the tax
Question 6h
Given the following information:
Demand: Qd = 200 – 5P
Supply: Qs = 5P
If a quantity tax of $2 per unit sold is imposed,
(h) What determines whether the buyer of the seller bears the burden of the tax?
Select one:
a. the elasticity of the demand curve
b. the elasticity of the supply curve
c. the elasticity of the supply and demand curve
d. the value of the tax
e. the price of the good