Book price and quantity effects

Assignment Help Macroeconomics

Reference no: EM1317045

Assume that the supply of a best-selling book at local book stores throughout the United States is a function price such that:

Q₅=-5+5P (Supply)

Where Q is the number of books sold (in thousands) and P is the book price. Given tha availability of this book on amazon.com for $20, demand is perfectly elastic at a price of $20.

Derive the second book supply curve based upon the assumption local sales are subject to an 8% sales tax that is not imposed on internet sales. Calculate the book price and quantity effects of the local 8% sales tax. With perfectly elastic demand, who pays the economic burden of such a tax?

Reference no: EM1317045

Questions Cloud

Demand and supply analysis from the given data : Plot both together on a supply-demand graph. Calculate the equilibrium P and Q, and show them on your graph as well. Also calculate CS (consumer surplus) at the equilibrium.

Calculate the binding energy of the 2s electron : Calculate the binding energy of the 2s electron in iron and calculate the binding energy of the 2s electron in iron. Does the new energy agree better with experiment?

Forming a report which show employee information : Form a report that show the employee information, show on the form you generated in 1) above. The report should display this information for all the users, sorted alphabetically in the ascending order by LastName.

Common stock valuation with various growth rates : Common stock valuation with various growth rates over a period and nonconstant growth Microtech Corporation is expanding rapidly and currently needs to retain all of its earnings

Book price and quantity effects : Calculate the book price and quantity effects of the local 8% sales tax. With perfectly elastic demand, who pays the economic burden of such a tax?

Test of single population mean : At the .05 significance level, can we conclude that the mean waiting time is less than 3 minutes?

Compare alkalide ion with the neutral alkali atom : Compare alkalide ion with the neutral alkali atom - For a given alkali metal, how does the ionic radius of the alkalide ion compare to that of the neutral alkali metal atom? Explain using physical arguments.

Prepare an income statement : MBA 640 Exam 1, Spring 1, 2014: Compute the unit product cost for one barbeque grill for each of the costing methods described in Chapter 9. Prepare an income statement for the year using the absorption approach.

Determining the largest possible value : Let 3 trails (they may not be independent), each of which is either success or not. Let X denotes number of successes. Assume E[X] = 1.8. Determine the largest possible value of P(X=3)?

User Account

All Pages