Question

In: Economics

The demand function for a commodity is described in terms of an equation: Px = -Qdx...

The demand function for a commodity is described in terms of an equation:
Px = -Qdx + 35, while the offering function Px = 0.5Qsx + 3. Taxes are subject to 30$ of the commodity. Determine also if the government provides
subsidy of 2$ for each unit of goods

a. What is the equilibrium price and the equilibrium quantity that occurs in the market
b. What is the equilibrium price and the equilibrium quantity before tax?
c. What is the equilibrium price and the equilibrium quantity after tax?
d. What is the equilibrium price and the equilibrium quantity before and after there are subsidies

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

The estimated demand function for commodity X is described by the following equation: ^ Qd =...
The estimated demand function for commodity X is described by the following equation: ^ Qd = 50 – 2Px + 1.5 In - 0.75 Py where Px = Price of commodity X In = Consumer Income Py = Price of commodity Y (a)Does the behavior of the consumer of this product follow the law of demand? Explain (b)Is commodity X a normal good or an inferior good? How did you know? (c)Comment on the relationship between commodity X and commodity...
The estimated demand function for commodity X is described by the following equation: Qd = 50...
The estimated demand function for commodity X is described by the following equation: Qd = 50 – 2Px + 1.5 In - 0.75 Py where Px = Price of commodity X In = Consumer Income Py = Price of commodity Y (a)Does the behavior of the consumer of this product follow the law of demand? Explain (b)Is commodity X a normal good or an inferior good? How did you know? (c)Comment on the relationship between commodity X and commodity Y....
If the demand for good X is QdX = 10 + aX PX + aY PY...
If the demand for good X is QdX = 10 + aX PX + aY PY + aMM. If M is the income and aM is positive, then: Goods y and x are complements Good x is an interior good Goods y and x are not related goods Goods y and x are interior goods Good x is a normal goods
Qdx = 2500 - 0.5 Px + 0.75 Py + 2.0 I, given that Px =...
Qdx = 2500 - 0.5 Px + 0.75 Py + 2.0 I, given that Px = $ 400, Py = $ 200 and I = $ 1500 Question: a.Calculate the price elasticity for good X and what is the economic meaning of the number, explain! b. Calculate the cross elasticity between goods X and Y and the income elasticity of good X and what is the economic meaning of the number, just put! c. If the price of goods X...
The demand function for your brand X shirts is estimated as Qdx   =   1,000 - 5...
The demand function for your brand X shirts is estimated as Qdx   =   1,000 - 5 Px - 10 Py + 9 PZ+ 0 .001 I The price of X is $ 10, Y is $ 4, Z is $ 10 and incomes are $ 20,000.                    1) What are your sales?                                                                                                               ______________ 2) What is the elasticity of demand for X?                                                                               _______________                                                                  3) What is the cross elasticity between X and Y?                                                                       ______________                                       4) Are...
Suppose that a consumer has the following demand function: x ∗ (px, py, m) = 3mpy/px...
Suppose that a consumer has the following demand function: x ∗ (px, py, m) = 3mpy/px . What type of good is good x? (Remember, m > 0, px > 0, py > 0) (a) ordinary, complement, normal (b) ordinary, complement, inferior (c) inelastic, substitute, inferior (d) ordinary, substitute, normal
Assume that demand for a commodity is represented by the equation P = 10 – 0.2...
Assume that demand for a commodity is represented by the equation P = 10 – 0.2 Q d, and supply by the equation P = 5+ 0.2 Qs where Qd and Q s are quantity demanded and quantity supplied, respectively, and P is the Price. Use the equilibrium condition Qs = Qd a. Solve the equations to determine equilibrium price b. Now determine the equilibrium quantity c. Graph the two equations to substantiate your answers and label these two graphs...
Assume that demand for a commodity is represented by the equation P = 10 – 0.2...
Assume that demand for a commodity is represented by the equation P = 10 – 0.2 Qd, and supply by the equation P = 5 + 0.2 Qs where Qd and Q s are quantity demanded and quantity supplied, respectively, and P is the Price. Use the equilibrium condition Qs = Qd , 1: Solve the equations to determine equilibrium price. 2: Now determine equilibrium quantity. 3: Graph the two equations to substantiate your answers and label these two graphs...
Assume that demand for a commodity is represented by the equation P = 20 – 0.6...
Assume that demand for a commodity is represented by the equation P = 20 – 0.6 Q d, and supply by the equation P = 10 + 0.2 Qs where Qd and Q s are quantity demanded and quantity supplied, respectively, and P is the Price. Use the equilibrium condition Qs = Qd 1: Solve the equations to determine equilibrium price. 2: Now determine equilibrium quantity. 3: Graph the two equations to substantiate your answers and label these two graphs...
Suppose the market demand for a commodity is given by the download sloping linear demand function:...
Suppose the market demand for a commodity is given by the download sloping linear demand function: P(Q) = 3000 - 6Q where P is a price and Q is quantity. Furthermore, suppose the market supply curve is given by the equation: P(Q) = 4Q a) Calculate the equilibrium price, quantity, consumer surplus and producer surplus. b) Given the equilibrium price calculated above (say's P*), suppose the government imposes a price floor given by P' > P*. Pick any such P'...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT