Question

This is due in 30 mins please help, Thank youThese next five problems consider tax incidence. Suppose the

market supply and demand for guitars in Happy Valley are given by:

Demand: P = 300 – (1/2)Q

Supply: P = 100 + (1/3)Q

What is the equilibrium price and quantity of the product?

P* = 120, Q* = 1200

P* = 180, Q* = 240

P* = 60, Q* = 480

P* = 225, Q* = 150

none of the above

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Question 17

2 pts

What is the price elasticity of demand at the equilibrium price?

Elasticity = -1

Elasticity = -2

Elasticity = -0.5

Elasticity = -0.666

none of the above

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Question 18

2 pts

For the next three questions, assume there is $20 per unit tax levied on the consumers of guitars. What price will buyers pay after the tax is imposed?

$192

$200

$160

$190

none of the above

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Question 19

2 pts

What is the quantity of the good that will be sold after the tax is imposed?

196

210

224

216

none of the above

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Question 20

2 pts

What is the deadweight loss created by the tax?

DWL = $360

DWL = $120

DWL = $240

DWL = $480

none of the above

 

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