Suppose that instead of a supply-demand diagram, you are given the following information:
Q_s = 90 + P
Q_d = 300 - 2P
From this information, compute the equilibrium price (P) and quantity (Q).
Now suppose that a tax (T) is placed on buyers so that
Q_d = 300 - 2(P + T).
If T = 12, solve for the new equilibrium price and quantity. (Note: P is the price received by sellers and P + T is the price paid by buyers.) Compare these answers for equilibrium price and quantity with your first answers. What does this show you?

Question

Quizplus · Accepted Answer

The Answer of Suppose that instead of a supply-demand diagram, you are given the following information: Q_s = 90 + P Q_d = 300 - 2P From this information, compute the equilibrium price (P) and quantity (Q). Now suppose that a tax (T) is placed on buyers so that Q_d = 300 - 2(P + T). If T = 12, solve for the new equilibrium price and quantity. (Note: P is the price received by sellers and P + T is the price paid by buyers.) Compare these answers for equilibrium price and quantity with your first answers. What does this show you?

Suppose That Instead of a Supply-Demand Diagram, You Are Given