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.

Expert Solution

Rahul Sunny answered 1 year ago

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?

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...

1. The market demand curve for a product is D(p) = q = 400 – 0.5p....

1. The market demand curve for a product is D(p) = q = 400 – 0.5p. The market supply curve is S(p) = q = 4p – 100. a. Find the inverse demand & supply curves. (2 point) b. Calculate the market equilibrium price & quantity. (2 points) c. Draw a graph depicting these curves & the market equilibrium price & quantity. (3 points) 2. A competitive firm has the following cost function: c(y) = 4y2 + 300. a. What...

1. Demand and Supply Model: Explain the relationship between Supply (S), Demand (D), quantity supplied (Qs),...

1. Demand and Supply Model: Explain the relationship between Supply (S), Demand (D), quantity supplied (Qs), quantity demanded (Qd), equilibrium, disequilibrium (shortages and surpluses), price ceilings, price floors, and alternative markets.

An inelastic supply increases. Compare the size of the changes in prices and quantities with the...

An inelastic supply increases. Compare the size of the changes in prices and quantities with the size of those changes that would occur the same increase in an elastic supply. The effects of an increase in an inelastic supply will be: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a a larger change in equilibrium quantity and a larger change in equilibrium price. b a larger change in equilibrium quantity and...

At equilibrium in a competitive market, S = D (i.e., supply is equal to demand). Is...

At equilibrium in a competitive market, S = D (i.e., supply is equal to demand). Is this good? Is this bad? What exactly does it mean?

A mid-point method is measured by using an of prices and quantities but a method is measured by using the slope of demand or supply curve.

A mid-point method is measured by using an ______ of prices and quantities but a ______ method is measured by using the slope of demand or supply curve.Group of answer choices：Slope: AverageSlope: Initial ValueAverage: SlopeInitial Value: Slope

2.) How do changes in supply/demand impact prices and the quantities of good produced/consumed? How do...

2.) How do changes in supply/demand impact prices and the quantities of good produced/consumed? How do these changes impact economic efficiency?

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.

Classical economists belief that prices and quantities adjust to the changes in the forces of supply...

Classical economists belief that prices and quantities adjust to the changes in the forces of supply and demand and that the economy produces its potential output in the long run. On the contrary, Keynesian economists believe because of price and wage rigidities the economy’s equilibrium output in the long run may be less than its potential output. What is price-wage rigidity? Do you agree with Keynes assessment that wage-price rigidity requires government’s involvement in the markets? Why? Why not?

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