Suppose the Financial Secretary of Utopia wants our help designing a per-pack tax to discourage smoking....

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Suppose the Financial Secretary of Utopia wants our help designing a per-pack tax to discourage smoking. Given a price P measured in Utopian dollars per pack and Q is number of cigarette packs, the demand and supply for cigarette (packs per year) are given by the equations: Demand: Q = 52000 - 250P Supply: Q=1000P 18000 Before the tax, the equilibrium price is P = 56 dollars per pack and the equilibrium quantity is Q = 38000 packs. Suppose the aim is to reduce cigarette consumption by 9500 packs. We should suggest a per-pack tax of [ Answer39 ] dollars. Suppose instead the Financial Secretary would like to use tax to generate a tax revenue of at least 600000 Utopian dollars per year. The lowest tax to achieve this tax revenue is [ Answer 40 ] dollars per pack. Suppose the Financial Secretary of Utopia wants our help designing a per-pack tax to discourage smoking. Given a price P measured in Utopian dollars per pack and Q is number of cigarette packs, the demand and supply for cigarette (packs per year) are given by the equations: Demand: Q = 52000 - 250P Supply: Q=1000P 18000 Before the tax, the equilibrium price is P = 56 dollars per pack and the equilibrium quantity is Q = 38000 packs. Suppose the aim is to reduce cigarette consumption by 9500 packs. We should suggest a per-pack tax of [ Answer39 ] dollars. Suppose instead the Financial Secretary would like to use tax to generate a tax revenue of at least 600000 Utopian dollars per year. The lowest tax to achieve this tax revenue is [ Answer 40 ] dollars per pack.

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Based on given information here the new quantity level Equilibrium quanti... View the full answer