Unformatted text preview: long run equilibrium price ? (b) What is the firms profit-maximizing level of output ? (c) What is the equilibrium quantity in the market/industry ? (d) If all firms are identical, how many firms will there be in the market? (3) The market demand equation is P Q d 1000 15000-= , and the market supply equation is P S 2000 = . To answer this question use the graph titled Welfare effects of a ( Specific ) Sales Tax . NOTE : I expect numerical answers for these questions. Also, indicate the deadweight loss on the graph. (a) Find the consumer surplus , the producer surplus , and the total surplus . (b) A ( specific ) sales tax of $3 is levied on the good. Now, find the consumer surplus , the producer surplus , the governments tax revenue , and the total surplus . What is the deadweight loss due to the tax ? 1...
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This note was uploaded on 04/14/2008 for the course ECON 256 taught by Professor ?? during the Summer '05 term at Bucknell.
- Summer '05