Assume that the demand and the supply in a market are represented by the following equations:
$$Q _ { D } = 40 - 2 P$$ $$Q _ { S } = 4 P - 20$$ (i)Compute the market equilibrium in this case.
(ii)If the government were to introduce an excise tax of $1.00 per unit of output, what would the new equilibrium be? What would the economic incidence of this tax be?

Question

Assume that the demand and the supply in a market are represented by the following equations:
 $$Q _ { D } = 40 - 2 P$$ $$Q _ { S } = 4 P - 20$$ (i)Compute the market equilibrium in this case.
(ii)If the government were to introduce an excise tax of $1.00 per unit of output, what would the new equilibrium be? What would the economic incidence of this tax be?

Quizplus · Accepted Answer

The Answer of Assume that the demand and the supply in a market are represented by the following equations:
 $$Q _ { D } = 40 - 2 P$$ $$Q _ { S } = 4 P - 20$$ (i)Compute the market equilibrium in this case.
(ii)If the government were to introduce an excise tax of $1.00 per unit of output, what would the new equilibrium be? What would the economic incidence of this tax be?

Assume That the Demand and the Supply in a Market QD=40−2PQ _ { D } = 40 - 2 PQD​=40−2P

Assume That the Demand and the Supply in a Market $Q _ { D } = 40 - 2 P$