Scenario: The Market for Good X:
The market for good X can be depicted with the following demand and supply equations: Demand: P = 50 - 1/2Q
Supply: P = 1/3Q
where P is price per unit and Q represents quantity in units.Policy makers plan on imposing a
$1 per unit tax on this good.
(Scenario: The Market for Good X) Look at the scenario The Market for Good X.If a $1 per unit tax is imposed on this good, the new supply curve will be:
A.P = 1/3Q + 1.
B.P = 50 - 1/2Q
C.P = 1/3Q - 1.
D.P = 1/3Q + 1 + 50 - 1/2Q.

Question

Quizplus · Accepted Answer

The Answer of Scenario: The Market for Good X:
The market for good X can be depicted with the following demand and supply equations: Demand: P = 50 - 1/2Q
Supply: P = 1/3Q
where P is price per unit and Q represents quantity in units.Policy makers plan on imposing a
$1 per unit tax on this good.
(Scenario: The Market for Good X) Look at the scenario The Market for Good X.If a $1 per unit tax is imposed on this good, the new supply curve will be:
A.P = 1/3Q + 1.
B.P = 50 - 1/2Q
C.P = 1/3Q - 1.
D.P = 1/3Q + 1 + 50 - 1/2Q.

Scenario: the Market for Good X