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13 (This problem uses some high-school algebra and is challenging)Suppose that a market is described by the following supply and demand quations:
Q(s)=2P
Q(d)=300-p
a. Solve for the equilibrium price and the equilibrium quantity
b. Suppose that a tax of T is placed on buyers,so the new demand wuations is Q(d)=300-(P+T).Solve for the new quilibrium.What happens to price received by sellers,the price paid by buyers,and the quantity sold?
c Tax revenue is T*Q,use your answer to part b to solve for tax revenue as a function of T.Graph this relationship for T between 0 and 300
d, The deadweight loss of a tax is the area of the triangle between the supply and demand curves.Recalling that the area of a triangle is 1/2*base*height,solve for deadweight loss as a function of T.Graph this relationship for T between 0 and 300.(Hint look sideways,the base of the deadweight loss triangle is T and the height is the difference between the quantity sold with the tax and the quantity sold without the tax)
e, The government now levies a tax on this good of $200 per unit.Is this a good policy?Why or why not?Can you propose a better policy?