(Advanced analysis) The equations for the demand and supply curves for a particular product are P = 10 − 0.4Q and P = 2 + 0.4Q, where P is price and Q is quantity expressed in units of 100. After an excise tax is imposed on the product, the supply equation is P = 3 + 0.4Q.The equilibrium quantity before the excise tax is imposed is

Question

Quizplus · Accepted Answer

To find the equilibrium quantity, we need to set the demand and supply equations equal to each other and solve for Q. 
Before the tax: 
10 − 0.4Q = 2 + 0.4Q 
8 = 0.8Q 
Q = 10 units of 100 or 1,000 units 
Therefore, the equilibrium quantity before the excise tax is imposed is 1,000 units.

(Advanced Analysis) the Equations for the Demand and Supply Curves