Unformatted text preview: Q D = 1 P . What price will maximize revenue? 3. Suppose the supply and demand curves for gasoline are given by Q D = 91 4 P Q S = 2 P (a) What is the equilibrium price and quantity? (b) What is the price elasticity of demand and supply at the equilibrium? (c) Suppose the government impose a $0.9/gallon tax on gasoline, paid by buyers. Solve for the new equilibrium. What portion of the tax is is paid by consumers, and what portion by sellers? 1...
View
Full Document
 Fall '09
 Elmes
 Microeconomics, Equilibrium, Price Elasticity, Supply And Demand, $0.9

Click to edit the document details