ECO101H1 Lecture Notes - Lecture 9: Dd National, Economic Equilibrium, Demand Curve
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Announcements: test 1 (oct 23rd: cover material shown on the syllabus [to lecture 11, on blackboard, a sample of past tests/answers is posted on blackboard. Price ceiling, price floor, incidence of a sales tax. Nothing changes with demand curve, remains the same with the no tax example. Price of seller received is (after tax, therefore the supply curve will shift, the supplier would only supply 7 units at p = . ) Now, the new equilibrium price is , qd = qs = 4. Impose the tax on seller but is shared with seller. For sellers to supply a given quantity, the price must rise by to be the same as before tax. Example: q = 5, p = 100, p0+10 = 110 -> sellers will supply 5 units only if price increases to . In dd-ss diagram, market price is on the vertical axis. If sales tax is levied on the seller, seller receives: market price tax.
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