Question 11 pts Suppose the demand for a product is given by P = 100 – 2Q. Also,

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Question 11 pts

Suppose the demand for a product is given by P = 100 – 2Q. Also, the supply is given by P = 20 + 6Q. If an $8 per-unit excise tax is levied on the buyers of a good, then after the tax buyers will pay _________ for each unit of the good.

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Question 21 pts

Suppose the demand for a product is given by P = 100 – 2Q. Also, the supply is given by P = 20 + 6Q. If an $8 per-unit excise tax is levied on the buyers of a good, then after the tax the sellers will receive _________ for each unit of the good.

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Question 31 pts

Suppose the demand for a product is given by P = 40 – 4Q. Also, the supply is given by P = 10 + Q. If a $10 per-unit excise tax is levied on the buyers of a good, what proportion of the tax will be paid by the buyers?

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Question 41 pts

Suppose the demand for a product is given by P = 50 –Q. Also, the supply is given by P = 10 + 3Q. If a $12 per-unit excise tax is levied on the buyers of a good, the deadweight loss created by this tax will be

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Question 51 pts

Suppose the demand for a product is given by P = 60 –2Q. Also, the supply is given by P = 10 + 3Q. If a $10 per-unit excise tax is levied on the buyers of a good, consumer surplus is equal to

Explanation / Answer

11. Option 4. None of these.

Explanation:

At the equilibrium level, demand = supply.

So, 100 - 2Q = 20 + 6Q
or, 8Q = 80
or, Q = 10

Now, puting the value of Q in the demand equation, we get P = 100 - 2Q = 100 - 2*10 = 80

So, the market equilibrium price is $80. After the $8 tax, the price will be $80 + $8 =$88

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