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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:

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Related questions

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:

Taxation Question (SHOW ALL WORK)

Suppose that the demand curve (hundreds) for apples is given by Qd = 140 - 5P, where Qd is the number of pounds demanded per year and p is the price per pound. The supply of apples can be described by Qs = 40 + 5P, where Qs is the number of pounds provided.

What is the equilibrium price? (Hint: At the equilibrium, quantity demanded and quantity supplied are equal, Qd = Qs.)

What is the equilibrium quantity supplied and demanded?

Calculate the consumer surplus at the equilibrium price.

Calculate the producer surplus at the equilibrium price.

Calculate the total surplus at the equilibrium price.

Now suppose that the government imposes a tax of $8 per each pound sold, paid by the producers. In this case, what are the price and the consumer surplus?

The wheat market is perfectly competitive, and the market supply and demand curves are given by the following equations:

QD=20,000,000-4,000,000P

QS=7,000,000+2,500,000P, where QD and QS are quantity demanded and quantity supplied measured in bushels, and P=price per bushel.

a.) Determine consumer surplus at the equilibrium price and quantity.

b.) Assume that the government has imposed a price floor at $2.25 per bushel and agrees to buy any resulting excess supply. How many bushels of wheat will the government be forced to buy? Determine consumer surplus with the price floor.

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