An industry's inverse demand was P^D = 20 - 0.1Q and its inverse supply was P^S...

An industry's inverse demand was P^D = 20 - 0.1Q and its inverse supply was P^S = 4 + 0.1Q.

Calculate the consumer surplus, producer surplus, government revenue and deadweight loss for taxes of $4, $8, $12 and $16 per unit sold.
Graph government revenue and deadweight loss as functions of these tax rates.
What tax maximizes government revenue?

Solutions

Expert Solution

i hope this would help you..if you like the work please appreciate thank you !

Rahul Sunny answered 2 weeks ago

Next > < Previous

Related Solutions

An industry's inverse demand was PD = 20 - 0.1Q and its inverse supply was PS...

An industry's inverse demand was PD = 20 - 0.1Q and its inverse supply was PS = 4 + 0.1Q. a. Calculate the consumer surplus, producer surplus, government revenue and deadweight loss for taxes of $4, $8, $12 and $16 per unit sold. b. Graph government revenue and deadweight loss as functions of these tax rates. c. What tax maximizes government revenue?

Home’s demand curve for wheat is D = 100-20P. Its supply curve is S = 20...

Home’s demand curve for wheat is D = 100-20P. Its supply curve is S = 20 + 20P. Suppose that Home is a small country. a. Graph the demand and supply curves. b. In the absence of trade, what would the price of wheat be in Home? c. The price of wheat in the world market is 1.5. What is the free-trade equilibrium price of wheat in Home? d. Determine the amount of domestic production, domestic consumption, and imports of...

Suppose the Demand and supply curve for a particular product is as follows: D(p)=60-5p S(p)=5p+20 Suppose...

Suppose the Demand and supply curve for a particular product is as follows: D(p)=60-5p S(p)=5p+20 Suppose city council considers implementing a small lump sum tax of $T per unit traded (i.e. if the consumer pays p then the producer receives p-T). Question: What is the tax incidence on consumers? Hint 2: The derivative of demand and supply with respect to price is just the slope of the curves, in this case -5, and 5 respectively.

Prices and quantities are determined by supply S = 0.5p – 20 and demand D =...

Prices and quantities are determined by supply S = 0.5p – 20 and demand D = 140 – 0.5p. Next month the government will introduce a tax of 40 dollars per unit. Provide a supply and demand diagram to illustrate and quantify the impact of this tax. Shade in the area representing government tax revenues in your diagram. With the tax in place government will earn tax revenues equal to __________ dollars.

Assume a competitive market with the following demand and supply curve, D(p) =a-b*P and S(p)= c...

Assume a competitive market with the following demand and supply curve, D(p) =a-b*P and S(p)= c + d*. Assume the government imposes a tax of t on each unit sold. The equilibrium prices without (P) and with the tax (net price Pn and gross price Pg ) are

Suppose the inverse demand and inverse supply functions for a good are given as P= 200-0.5Q...

Suppose the inverse demand and inverse supply functions for a good are given as P= 200-0.5Q and P= 20 + 0.5 Q. Calculate the initial equilibrium price and quantity. Draw the above inverse demand and inverse supply functions. Suppose a per unit tax of $10.00 was levied on sellers. Determine graphically and algebraically the effect of the tax on the price paid by demanders, the price received by sellers, the total tax paid, and the fraction of the tax paid...

Let D = demand, S = supply, P = equilibrium price, and Q = equilibrium quantity....

Let D = demand, S = supply, P = equilibrium price, and Q = equilibrium quantity. What happens in the market for electric vehicles if the government offers incentives to manufacturers to produce more electric vehicles? Provide a graphical representation to your answer in question 5. The graph can either be hand-drawn or copied from the textbook or other online sources.

A water supply company faces the following inverse demand function: P = 100 – 2Q. Its...

A water supply company faces the following inverse demand function: P = 100 – 2Q. Its cost function is C = 100+2Q. Note P is the water rate per thousand liters of water and Q is the quantity measured in thousand liters of water. Calculate the firm’s profit-maximizing output and price. What profit it will make? Will there be a deadweight loss to society? How much? Suppose a government regulator regulates the price following the marginal cost pricing rule. What...

2. Consider an inverse demand curve and inverse supply curve given by Q D = 52,...

2. Consider an inverse demand curve and inverse supply curve given by Q D = 52, 000 − 200P Q S = −8, 000 + 400P a. Find equilibrium price. b. Find equilibrium price. c. Now solve for producer surplus at equilibrium. Show your work! HINT: You will need to know find what price is when the supply curve crosses the y-axis. d. And do the same for consumer surplus at equilibrium. Show your work! e. What if the government...

suppose the market demand and supply functions are: D=10-P S= -1+P The government implements an excise...

suppose the market demand and supply functions are: D=10-P S= -1+P The government implements an excise tax of t=3 --------- A) What is the supply function under the tax? B)What are the Equilibrium output and price the consumers pay? C) What are the consumer surplus and total surplus under the tax?

Subjects