The market for cigars is characterized by Q^D = 10

Question

The market for cigars is characterized by Q^D = 10 - 0.25P and Q^S = 0.15P, where P is price per box of cigars and Q measures boxes per hour.
a. What is the equilibrium price of cigars?
b. Suppose the government taxes sellers $5 per box. What are the after-tax prices that buyers pay and sellers receive?
c. Suppose the government taxes buyers rather than sellers $5 per box. What are the after-tax prices that buyers pay and sellers receive?

Quizplus · Accepted Answer

The Answer of The market for cigars is characterized by Q^D = 10 - 0.25P and Q^S = 0.15P, where P is price per box of cigars and Q measures boxes per hour. a. What is the equilibrium price of cigars? b. Suppose the government taxes sellers $5 per box. What are the after-tax prices that buyers pay and sellers receive? c. Suppose the government taxes buyers rather than sellers $5 per box. What are the after-tax prices that buyers pay and sellers receive?

The Market for Cigars Is Characterized by QD = 10