Suppose we know the following about the inverse supply and demand curves in a perfectly competitive industry:
Demand: P= 46-3Q
Supply: P= -14 + 2Q
a) Determine the equilibrium price and quantity.
b) If an excise tax of $10 is imposed on the suppliers of the product, determine
I. the new price paid by consumers
II. the new price received by the producers
III. the new quantity
IV. the consumer surplus after the tax.
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