Suppose that the demand function for aluminum is: Q=40-0.2p. where p is the price paid by consumers
Question:
Suppose that the demand function for aluminum is: Q=40-0.2p.
where p is the price paid by consumers in dollars per pound and Q is the quantity demanded measured in pounds.
The supply curve for aluminum is estimated to be: Q = 0.2p, such that n = 1.
The pre-tax equilibrium price is $ _____ (round your answer to the nearest penny).
The pre-tax equilibrium quantity is _____ (rounded to two decimal places).
If a $10 tax per pound is placed on aluminum, the price paid by consumers would be $_____ (round your answer to the nearest penny)
And the new equilibrium quantity sold is _____ (enter your response rounded to two decimal places)
The price the aluminum producing firms receive is $ _____ (round your answer to the nearest penny).
In percentage form, the ad valorem tax that would raise the same level o revenue is _____% (round your answer to one decimal place.
Expert Answer:
The pretax equilibrium price is 100 round your answer to the nearest penny The pretax ... View the full answer
