The market demand for good Y is described by the function YD = 310 - 6PD, and the market supply of good Y is given by function YS = 4PS. (YD is the quantity of good Y demanded, PD is the demander price (in $) per unit of good Y, and PS is the supplier price (in $) per unit of good Y).
a) Find the market equilibrium quantity and equilibrium price.
b) Suppose that Government plans to apply a tax of 10$ per unit of good Y. Find the impact of this tax on market equilibrium. What are the new equilibrium quantity, the demander price, and the supplier price in case of implementation of this policy?
c) Suppose that Government plans to apply a subsidy of 20$ per unit of good Y. Find the impact of this subsidy on market equilibrium. What are the new equilibrium quantity, the demander price, and the supplier price in case of implementation of this policy?
The market demand for good Y is described by the function YD = 310 - 6PD, and the market supply of good Y is given by function YS = 4PS. (YD is the quantity of good Y demanded, PD is the demander price (in $) per unit of good Y, and PS is the supplier price (in $) per unit of good Y).
a) Find the market equilibrium quantity and equilibrium price.
b) Suppose that Government plans to apply a tax of 10$ per unit of good Y. Find the impact of this tax on market equilibrium. What are the new equilibrium quantity, the demander price, and the supplier price in case of implementation of this policy?
c) Suppose that Government plans to apply a subsidy of 20$ per unit of good Y. Find the impact of this subsidy on market equilibrium. What are the new equilibrium quantity, the demander price, and the supplier price in case of implementation of this policy?
