Midcontinent Plastics makes 80 fiberglass truck hoods per day for large truck manufacturers. Each hood sells for $500.00. Midcontinent sells all of its product to the large truck manufacturers. Suppose the own price elasticity of demand for hoods is 0.4 and the price elasticity of supply is 1.5.
a. Compute the slope and intercept coefficients for the linear supply and demand equations.
b. If the local county government imposed a per unit tax of $25.00 per hood manufactured, what would be the new equilibrium price of hoods to the truck manufacturer?
c. Would a per unit tax on hoods change the revenue received by Midcontinent?

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The Answer of Midcontinent Plastics makes 80 fiberglass truck hoods per day for large truck manufacturers. Each hood sells for $500.00. Midcontinent sells all of its product to the large truck manufacturers. Suppose the own price elasticity of demand for hoods is 0.4 and the price elasticity of supply is 1.5.
a. Compute the slope and intercept coefficients for the linear supply and demand equations.
b. If the local county government imposed a per unit tax of $25.00 per hood manufactured, what would be the new equilibrium price of hoods to the truck manufacturer?
c. Would a per unit tax on hoods change the revenue received by Midcontinent?

Midcontinent Plastics Makes 80 Fiberglass Truck Hoods Per Day for Large