Calculate consumer surplus for this market before any tax

Assignment Help Business Economics

Reference no: EM131095544

Remote airplanes. specialized market for hobbyists, we'll just have to assume that there are enough buyers and sellers such that the demand and supply curves are smooth, straight lines. The vertical intercept for the demand curve is at 500 and the vertical intercept for the supply curve is at 100. Initially, there is no tax on the market, and the airplane sells a quantity of 40 units at a price of $420.

But at some point, because both production of and using the plane in play causes air pollution, the government puts a tax on the market. The tax is $80 per airplane, and with the tax the price received by sellers becomes $356, with a quantity of 32 units sold.

Calculate consumer surplus for this market before any tax is applied, carefully following all numeric instructions.

Reference no: EM131095544

Questions Cloud

Even mention safety in their advertising : Many automobile manufacturers routinely advertise the safety of their cars, yet airlines generally do not even mention safety in their advertising. Can you suggest an explanation for this difference?

Competition lead to quality improvements and cost reductions : How might protective tariffs reduce both the imports and the exports of the nation that levies tariffs? How might the import competition lead to quality improvements and cost reductions by American firms?

The percentage tax or the flat tax : Compare the effect of a $1,000 tax on cars with the effect of a 10 percent tax on cars. Which tax is likely to have the same impact on the demand for cars (in percentage terms) no matter which year it was imposed? In other words, if the tax was impos..

Calculate producer surplus for market after tax is applied : The vertical intercept for the demand curve is at 500 and the vertical intercept for the supply curve is at 100. Initially, there is no tax on the market, and the airplane sells a quantity of 40 units at a price of $420. But at some point, because bo..

Calculate consumer surplus for this market before any tax : Remote airplanes. specialized market for hobbyists, we'll just have to assume that there are enough buyers and sellers such that the demand and supply curves are smooth, straight lines. Calculate consumer surplus for this market before any tax is app..

Higher steady-state capital stock : A higher steady-state capital stock has both a positive and negative effect on consumption per worker in the Solow growth model (assume no population or technological growth). Why?

Corporate finance project : Each student is required to perform a research on a Corporate Finance project that involves writing a report (25-30 pages) on a publicly traded company based on its available current financial data. The project involves four parts, namely,

Federal reserve are enough to prevent financial panics : The Fed was initially created in response to a series of bank runs in the early 1900s. How do you assess the potential of such crises in today's financial world? Do you think that the regulating tools used by the Federal Reserve are enough to prevent..

Economies of scale exist whenever long-run average costs : Economies of scale exist whenever long-run average costs

User Account

All Pages