Question: Demand function is given by P(price)=80-0.5Q(quantity) Supply function is given by p=50+0.25Q The government imposes a tax of $15 on every unit sold A) Find

  • Demand function is given by P(price)=80-0.5Q(quantity)
  • Supply function is given by p=50+0.25Q
  • The government imposes a tax of $15 on every unit sold

A) Find equilibrium price and quantity before the tax is imposed

B) Find the price of the buyer and seller and the quantity sold after the tax is imposed

C) What is the tax burden of the buyer and seller?

D) Find the government revenue, deadweight loss (DWL), and DWL as a % of tax revenue

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