QUESTION 1 1 points 00-155 -4P and Qs- -369+72p before a tax of $2 is added to e
ID: 1164485 • Letter: Q
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QUESTION 1 1 points 00-155 -4P and Qs- -369+72p before a tax of $2 is added to each unit of the good. What is the post tax price paid by consumers? Hint: Becouse suppliers moke their decision based on how much they receive after tax, the new supply function is: Qs-369+72(P-2) ) ROUND TO THE NEAREST CENT QUESTION 2 1 pointsSa D 52-6P and Qs- 330+75P before a tax of $1 is added to each unit of the good. What is the post tax equilibrium quantity? Hint Becouse suppliers make their decision bosed on how much they receive after tox, the new supply function is: Os 330 75(P1)) ROUND TO THE NEAREST TWO DECIMAL PLACES QUESTION 3 1 points Save A 0o 127 - 2P and Qs 459 + 83p before a tax of $2 is added to each unit of the good. What is the total amount of taxes paid by consumers (Hine Becouse suppliers moke their decision based on how much they receive ofter tox, the new supply function Q- 459 83(0-2)) ROUND TO THE NEAREST CENT Click Sove and Submit to sove and submit. Click Sove All Answers to sove afll answers Save All Answers Clese windowExplanation / Answer
Answer : 1) After tax impose the supply function becomes, QS = - 369 + 72 (P-2) [ Given ]
=> Q = - 369 + 72P - 144
=> Q = - 513 + 72P
=> (Q + 513) / 72 = P
The demand function is QD = 155 - 4P
=> 4P = 155 - Q
=> P = (155 - Q) / 4
At equilibrium condition, demand = supply.
Now by putting demand and supply functions in equilibrium condition, we get,
=> (155 - Q) / 4 = (Q + 513) / 72
=> [(155 - Q)/4 ]×72 = Q + 513
=> (155 - Q)×18 = Q + 513
=> 2,790 - 18Q = Q + 513
=> 2,790 - 513 = Q + 18Q
=> 2,277 = 19Q
=> Q = 2,277 / 19
=> Q = 119.84
From demand function we get,
P = (155 - 119.84)/4 = 8.79
Therefore, after tax impose consumers pays for good $8.79 per unit.
2) After tax impose, the supply function is
QS = - 330 + 75 (P-1) = - 330 + 75P - 75
=> Q= - 405 + 75P
=> (Q + 405)/75 = P
The demand function is
QD = 52 - 6P
=> 6P = 52 - Q
=> P = (52 - Q)/6
At equilibrium condition, demand = supply. Now putting demand and supply functions in equilibrium condition we get,
(52 - Q)/6 = (Q + 405)/75
=> [ (52 - Q)/6 ]×75 = Q + 405
=> (52 - Q)×12.5 = Q + 405
=> 650 - 12.5Q = Q + 405
=> 650 - 405 = Q + 12.5Q
=> 245 = 13.5Q
=> Q = 245/13.5
=> Q = 18.15
Therefore, after tax impose the equilibrium quantity level is 18.15 units.
3) Before tax imposition,
The demand function is
QD = 127 - 2P
=> 2P = 127 - Q
=> P = (127 - Q)/2
The supply function is ,
QS = - 459 + 83P
=> Q + 459 = 83P
=> P = (Q + 459)/83
At equilibrium, demand = supply. Putting demand and supply functions in equilibrium condition we get,
(127 - Q)/2 = (Q + 459)/83
=> [ (127 - Q)/2 ]×83 = Q + 459
=> (127 - Q)×41.5 = Q + 459
=> 5,270.5 - 41.5Q = Q + 459
=> 5,270.5 - 459 = Q + 41.5Q
=> 4,811.5 = 42.5Q
=> Q = 4,811.5 / 42.5
=> Q = 113.21
From demand function we have,
P = (127 - 113.21)/2 = 6.895 = 6.9
After imposing tax, the supply function becomes,
QS = - 459 + 83 (P-2) = - 459 + 83P - 166
=> Q = - 625 + 83P
=> (Q + 625)/83 = P
Now putting this supply function at equilibrium condition we get,
(127 - Q)/2 = (Q + 625)/83
=> [ (127 - Q)/2 ]×83 = Q + 625
=> (127 - Q)×41.5 = Q + 625
=> 5,270.5 - 41.5Q = Q + 625
=> 5,270.5 - 625 = Q + 41.5Q
=> 4,645.5 = 42.5Q
=> Q = 4645.5 /42.5
=> Q = 109.31
From demand function we get,
P = (127 - 109.31) / 2 = 8.85
Therefore, after tax imposition the price level is increased by (8.85 - 6.9) = $1.95 . This means $1.95 per unit tax amount is paid by the consumer and (2 - 1.95) = $0.05 per unit tax amount is paid by the producer [as total imposed tax is $2 per unit.] .
Therefore, after tax impose, for quantity level 109.31 units consumers total paid tax amount is
(109.31 × 1.95) = $ 213.15 [ As consumers pays $1.95 per unit tax] .
4) Before tax impose,
The demand function is ,
QD = 129 - 5P
=> 5P = 129 - Q
=> P = (129 - Q)/5
Supply function is,
QS = - 358 + 76P
=> Q + 358 = 76P
=> (Q + 358)/76 = P
Putting demand and supply functions at equilibrium condition we get,
Demand = Supply
=> (129 - Q)/5 = (Q + 358)/76
=> [ (129 - Q)/5 ] × 76 = Q + 358
=> (129 - Q)×15.2 = Q + 358
=> 1,960.8 - 15.2Q = Q + 358
=> 1,960.8 - 358 = Q + 15.2Q
=> 1602.8 = 16.2Q
=> Q = 1602.8 / 16.2
=> Q = 98.94
From the demand function we have,
P = (129 - 98.94)/5 = $6.01
After tax impose, the supply function becomes
QS = - 358 + 76 (P-2) = - 358 + 76P - 152
=> Q = - 510 + 76P
=> Q + 510 = 76P
=> (Q + 510) / 76 = P
Now putting this supply function in equilibrium condition we get,
(129 - Q)/5 = (Q + 510)/76
=> [ (129 - Q)/5 ] × 76 = Q + 510
=> (129 - Q)×15.2 = Q + 510
=> 1,960.8 - 15.2Q = Q + 510
=> 1,960.8 - 510 = Q + 15.2Q
=> 1,450.8 = 16.2Q
=> Q = 1450.8 / 16.2
=> Q = 89.56
From the demand function we get,
P = (129 - 89.56) / 5 = $7.89
Therefore, after tax impose the price level is increased by (7.89 - 6.01) = $1.88 . This means consumers pays $1.88 per unit tax and producer pays (2 - 1.88) = $0.12 per unit tax.
Therefore, after tax impose, for quantity level 89.56 units, producer's total paid tax amount is
(89.56 × 0.12) = $10.75 [ As producers pays only $0.12 per unit tax ].
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