Consider that the demand for potato chips is Q = 8000 1000P and the supply of...

 

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Consider that the demand for potato chips is Q = 8000 1000P and the supply of potato chips is Q = 2000P - 4000. [a.] What is the price consumers pay and the quantity traded (the amount consumers' buy)? Suppose the government imposes a $1.50 excise tax. [b.] What is the price consumers pay and the quantity traded (the amount consumers' buy)? [c.] What is the tax burden on consumers? What can you say about the consumers' price elasticity compared to producers'? Consider that instead of the excise tax, the government imposes a $3.50 price control. [d.] What type of price control is this? [e.] What is the price consumers pay and the quantity traded (the amount consumers' buy)? Consider that the demand for potato chips is Q = 8000 1000P and the supply of potato chips is Q = 2000P - 4000. [a.] What is the price consumers pay and the quantity traded (the amount consumers' buy)? Suppose the government imposes a $1.50 excise tax. [b.] What is the price consumers pay and the quantity traded (the amount consumers' buy)? [c.] What is the tax burden on consumers? What can you say about the consumers' price elasticity compared to producers'? Consider that instead of the excise tax, the government imposes a $3.50 price control. [d.] What type of price control is this? [e.] What is the price consumers pay and the quantity traded (the amount consumers' buy)?

Answer rating: 100% (QA)

To solve this problem we need to find the equilibrium price and quantity in the market for potato ch... View the full answer