Suppose the market for a pack of cigarettes can be expressed as QP (P) = -...

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Suppose the market for a pack of cigarettes can be expressed as QP (P) = - 2P and QS (P) = 3P. = 100 (a) Find the equilibrium price and quantity. (b) Find the elasticity of demand at the equilibrium point, &. (c) Find the elasticity of supply at the equilibrium point, n. (d) In New Jersey, cigarettes are subject to a t = 2.70$ per pack excise tax. Given that an excise tax is paid by sellers, what is the new market supply function? (e) Find new equilibrium price and quantity with an excise tax. What is the price paid by the buyers, PB, and the amount of money collected by sellers, Ps? (f) How much tax revenue is collected by the government? What fraction is paid by buyers/sellers? Suppose the market for a pack of cigarettes can be expressed as QP (P) = - 2P and QS (P) = 3P. = 100 (a) Find the equilibrium price and quantity. (b) Find the elasticity of demand at the equilibrium point, &. (c) Find the elasticity of supply at the equilibrium point, n. (d) In New Jersey, cigarettes are subject to a t = 2.70$ per pack excise tax. Given that an excise tax is paid by sellers, what is the new market supply function? (e) Find new equilibrium price and quantity with an excise tax. What is the price paid by the buyers, PB, and the amount of money collected by sellers, Ps? (f) How much tax revenue is collected by the government? What fraction is paid by buyers/sellers?

Answer rating: 100% (QA)

a To find the equilibrium price and quantity we need to set QPP equal to QSP and solve for P 100 2P 3P 5P 100 P 20 Now that we have the equilibrium pr... View the full answer