The market for widgets can be described by the following equations: Demand: P = 10 -Q Supply: P = Q- 4 Equilibrium price is $3 and equilibrium quantity is 7. a) Suppose that government imposes a tax of $0.5 per unit to reduce widget consumption. What will the new cquilibrium and quantity be? b) What price will the buyer pay? %3D %3D 3.

The market for widgets can be described by the following equations: Demand: P = 10 -Q Supply: P = Q- 4 Equilibrium price is $3 and equilibrium quantity is 7. a) Suppose that government imposes a tax of $0.5 per unit to reduce widget consumption. What will the new cquilibrium and quantity be? b) What price will the buyer pay? %3D %3D 3.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter20: Elasticity: Demand And Supply

Section: Chapter Questions

Problem 16E: Who would pay a tax imposed on the supplier when the price elasticity of supply is inelastic and the...

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