Question: PLEASE HELP ME EXPLAIN STEP BY STEP WHY THESE QUESTIONS HAVE ANSWERS LIKE THIS Scenario B : Suppose a perfectly competitive market has the following

PLEASE HELP ME EXPLAIN STEP BY STEP WHY THESE QUESTIONS HAVE ANSWERS LIKE THIS

Scenario B:

Suppose a perfectly competitive market has the following demand and supply:

QD = 200 - 10p

QS = 5p - 40

A tax of $6 on each unit sold is imposed on sellers in the market.

  1. With the tax, what will be the price and quantity in equilibrium?

p = ____18____ Q =____20______

  1. What is the total amount of tax revenue collected by the government?

GR = ________120______

  1. Find the Consumer Surplus, Producer Surplus, and Deadweight loss resulting from the tax:

CS = ______20___ PS = ________40___ DWL = _______60____

  1. Suppose that instead of a tax, a price floor is set at p=18. Find the resulting Consumer Surplus, Producer Surplus, and Deadweight loss from the price control.

CS = ______20____ PS = ___160_______ DWL = _______60_____

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!