Suppose that the demand curve for barley can be characterized by the equation P = 100...

Suppose that the demand curve for barley can be characterized by the equation P = 100 - 2Qd. Suppose further that price was $10.00 and a $10.00 tax is imposed on the market. a) How many barleys would be purchased at a price of $10.00? After tax? b) What is the amount of tax revenue generated by the tax? c) How much excess burden is generated by the tax? d) What is the amount of consumer surplus before and after the tax? What is the difference in consumer surplus? Is it equal to excess burden plus the tax revenue?

Expert Solution

Rahul Sunny answered 6 months ago

Suppose the demand curve in a city is given by P = 100 - 2Q, where...

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1. Suppose the Demand curve for heaters is P = 100 – Q. Suppose firms face...

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