Unformatted text preview: Q : 120 - Q** = 0.5 Q** + 15 Q** = 70. Substitute in each equation to get P D = $50 and P S = $35. (ii) How much money does the state government collect as tax revenue? Q** x t = 70 x $15 = $1050. (iii) Calculate much of the tax burden falls on the producers and how much on the consumers. The per-unit burden on consumers is $50-$40 = $10. The per-unit burden on producers is $40-$35 = $5. Multiply each number by Q** to get the total burden: $700 and $350....
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This note was uploaded on 10/26/2010 for the course ECONOMICS ECON 201 taught by Professor Dr.shomubanerjee during the Summer '07 term at Emory.
- Summer '07