The demand for gasoline is P = 5 - 0.002Q and the supply is P = 0.2 + 0.004Q, where P is in dollars and Q is in gallons. If a tax of $1/ gal is placed on gasoline, what is the incidence of the tax? What is the lost consumer surplus? What is the lost producer surplus?
Answer to relevant QuestionsSuppose that bicycles are produced by a perfectly competitive, constant-cost industry. Which of the following will have a larger effect on the long-run price of bicycles: (1) a government program to advertise the health ...Name ten elements that you have access to in macroscopic quantities as a consumer here on Earth. Now suppose the monopolist in Problem 2 has a long- run marginal cost curve of MC = 20. Find the monopolist’s profit-maximizing quantity and price. Find the efficiency loss from this monopoly.While grading a final exam a professor discovers that two students have virtually identical answers. He talks to each student separately and tells them that he is sure that they shared answers, but he cannot be sure who ...Consider a population with two types of people, C’s and D’s. Interactions among various combinations of the two types produce the following payoffs: C- C: 6 each C- D: 8 for D, 0 for C D- D: 4 each Invisible contact ...
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