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ECON 201 (44)


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ECON 201
Corey Van De Waal

e Th areuse lyyon caaxtit sis ityyo pract it t a per unfs pue otitfittThitelge subsidy shifts the supply curve to the right since the producers costs have fallen and theA per unit subsidy is simply the opposnow willing to supply more at any given price leveldelht rewrite the tax analgnowk lsubsidywithin the context of a subsidy instead ou miQcayS tiLECTURE 3SeoretaxthSeexercisethg33ave h we tood learninaggg y gthow of a taxWe will return to an application of this concept in this classAs a the last few slides of lecture 2 SubsidiesNththththtilkldlttitttilNby solving an example of a unit tax on producersPonsting equaiowllofe th 150 2P 150 230 y DDbven i2P2P 3030s are g 3Ptilibrium price P and substitute this 150e 150 2P to obtain the QS Since both of these equations are kPPD5P150D150cQti DD3P150 2Pt QQQS concerf od 3P and into QSemand dy anl 3PQ 330Qe suppSSt equilibrium we know that Qfunctions of P we can solve for the equmagical P back into the supply and demand equations to find the equilibrium quantityQa Solve for the equilibrium price and quantityASub P30 into QQQ90Q90EXAMPLEThldddfttiktibthfllitiTh
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