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Unformatted text preview: 2. (15 points) Suppose market demand is given by P = 120 2Q and market supply is given by P = 2Q + 20. a. What is the market equilibrium price and quantity? b. Now suppose the government provides an excise tax of $10 per unit. What will the new equilibrium quantity be? What price will the buyer pay? What price will the seller receive? c. How much is the deadweight loss due to the tax?...
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This note was uploaded on 08/30/2011 for the course ECON 300 taught by Professor Zh during the Spring '11 term at SUNY Albany.
- Spring '11