Suppose the government impose a tax of 20 per unit of, Ask an Expert

Economics

In a competitive market the industry demand and supply curves are P = 200 - .2Dd and P = 100 + .3Qs respectively.

a. Find the market equilibrium price and output?

b. Suppose the government impose a tax of $20 per unit of output on all firm in the industry. What effect doest this have on the industry supply curve? Find the new competitive price and output? What portion of the tax have been passed on to consumers via a higher price.

c. Suppose $20-per-unit sale tax is imposed on consumers. What affect does this have on the industry demand curve? Find the new competitive price and output. Compare this to the answer to you portion of the to findings in part (b).

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9499880

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