There is a concern that carbon emissions that are a byproduct of the burning of coal and other fuels contributes to global warming. One proposed solution is to tax the use of these fuels based on their carbon content. The following table gives information on the demand and supply of coal: $$\begin{array} { | l | r r r r r | }
\hline \text { Price (\$/ton) } & 400 & 358 & 300 & 250 & 200 \
\hline \text { Quantity demanded } & 10 & 12 & 14 & 16 & 18 \
\hline \text { Quantity supplied } & 18 & 16 & 14 & 12 & 10 \
\hline
\end{array}$$ What will be the free-market price and quantity, and what will be the price and quantity if the government requires suppliers to pay a $100 tax for each ton of coal produced?

Question

There is a concern that carbon emissions that are a byproduct of the burning of coal and other fuels contributes to global warming. One proposed solution is to tax the use of these fuels based on their carbon content. The following table gives information on the demand and supply of coal: $$\begin{array} { | l | r r r r r | } 
\hline \text { Price (\$/ton) } & 400 & 358 & 300 & 250 & 200 \
\hline \text { Quantity demanded } & 10 & 12 & 14 & 16 & 18 \
\hline \text { Quantity supplied } & 18 & 16 & 14 & 12 & 10 \
\hline
\end{array}$$ What will be the free-market price and quantity, and what will be the price and quantity if the government requires suppliers to pay a $100 tax for each ton of coal produced?

Quizplus · Accepted Answer

The Answer of There is a concern that carbon emissions that are a byproduct of the burning of coal and other fuels contributes to global warming. One proposed solution is to tax the use of these fuels based on their carbon content. The following table gives information on the demand and supply of coal: $$\begin{array} { | l | r r r r r | } 
\hline \text { Price (\$/ton) } & 400 & 358 & 300 & 250 & 200 \
\hline \text { Quantity demanded } & 10 & 12 & 14 & 16 & 18 \
\hline \text { Quantity supplied } & 18 & 16 & 14 & 12 & 10 \
\hline
\end{array}$$ What will be the free-market price and quantity, and what will be the price and quantity if the government requires suppliers to pay a $100 tax for each ton of coal produced?

There Is a Concern That Carbon Emissions That Are a Byproduct