Econ100B PS4

Econ100B PS4 - a short and long run equilibrium. 4. What is...

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Economics 100B Problem Set 4 Answers will be posted on May 16, 2008 Consider the following demand and short-run supply functions: Q D = 1000 - 10 P Q S = 10 + 200 P 1. What is the competitive market equilibrium price and quantity? 2. Impose a $1 per unit tax that is paid by the producer. Find the new quantity and price in the short run. 3. In the short run what fraction of the burden of the tax falls on consumers? Producers? Now add the assumption that the market equilibrium price and quantity you found for (a) is both
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Unformatted text preview: a short and long run equilibrium. 4. What is the long run supply curve (assuming perfect competition, free entry, and no tax)? 5. What is the long run supply curve with a $1 per unit tax imposed? 6. With a $1 per unit tax, what is the long run price and quantity? How is the burden of the tax distributed between producers and consumers? 7. Compare the dead weight loss in the short run and in the long run Good practice problems from Perloff: 31, 32, 33, 34, 35, 36....
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