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Unformatted text preview: and demand curves given by P = Q s + 800 and P = 8000-3 Q d respectively, where Q d and Q s are the quantity demanded and supplied in hundreds of units and P is the price (in $ ) per unit. (a) Find the equilibrium quantity & price for Xbox 360 in the market. Now suppose the government believes that teenagers in Hong Kong are spending an inordinate amount of time on video games at the expense of their studies and hence, to discourage their use it levies a sales tax of $400 on each unit of Xbox 360 bought in Hong Kong. (b) How many Xbox 360’s will be sold at equilibrium? What price do buyers pay and what price do sellers get? (c) How much revenue does the government collect from the tax? (d) What percentage of the tax do the sellers and the buyers bear respectively? Q3. Practice Problem 9 (pg. 111-112) from Chapter 1.6 in Jacques’ textbook ....
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This note was uploaded on 02/22/2009 for the course ECONOMICS 4313 taught by Professor Tsui during the Spring '09 term at HKU.
- Spring '09