Tax Problem. Consider a perfectly competitive market were demand is Q = 100 - P and Supply is
Q = P - 10.

-Refer to Tax Problem.In the absence of any government intervention (e.g.taxes or price controls),the market equilibrium is

Question

Tax Problem. Consider a perfectly competitive market were demand is Q = 100 - P and Supply is 
Q = P - 10.

-Refer to Tax Problem.In the absence of any government intervention (e.g.taxes or price controls),the market equilibrium is

Quizplus · Accepted Answer

To find the market equilibrium, set the demand and supply equations equal to each other: 100 - P = P - 10. Solving this equation gives P = 55. Substituting P = 55 into either the demand or supply equation gives Q = 45.