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15 Apr 2021
Suppose the market for farm machinery in Canada can be represented by the following equations:
Qd = 300,000 - 10 P
Qs = 50,000 + (5/2) P
where Qd and Qs are, respectively, the quantity demanded and quantity supplied of farm machines per year and P is price of each machine (in dollars). Suppose the government imposes a $1,000 per unit tax on the purchasers. The incidence of the tax can be described by:
Suppose the market for farm machinery in Canada can be represented by the following equations:
Qd = 300,000 - 10 P
Qs = 50,000 + (5/2) P
where Qd and Qs are, respectively, the quantity demanded and quantity supplied of farm machines per year and P is price of each machine (in dollars). Suppose the government imposes a $1,000 per unit tax on the purchasers. The incidence of the tax can be described by: