Calculate the dead-weight loss due to the sales tax

Assignment Help Business Economics

Reference no: EM13801018

Suppose the market for cigarettes is characterized by the following information:

Qd = 70 5P [Demand]

Qs = 3P 10 [Supply]

Suppose the government imposes a sales tax of $2 per unit. Calculate the Dead-WeightLoss due to the sales tax.

[Note: P = price per unit; Qd = thousands of units demanded; Qs = thousands of units supplied]

Reference no: EM13801018

Questions Cloud

Engineering group about the new product : You just had Terry, one of your team members from marketing, give a presentation to the engineering group about the new product and its importance to the company's product line.

Under the learning curve model : 18 years ago, a certain part cost $325. The cost index was 244 and now the index is 329. What cost below is closest to the estimated current cost for the item? Item number 16 took 190 minutes to make. If the learning curve rate is 90%, how long did t..

Identify your potential stakeholder and their characteristic : Identify your potential stakeholders and their characteristics in your organization using the tools and techniques described in PMBOK.

After issue bond will increase decrease or nothing changes : Investment firm isuued $1000 per value bond conversion price $25 share issue underlying price $20 1.Calculate convertible issue & ratio 2. After issue bond will increase decrease or nothing changes in bond? Underlying price $23 changed constant is th..

Calculate the dead-weight loss due to the sales tax : Suppose the market for cigarettes is characterized by the following information: Suppose the government imposes a sales tax of $2 per unit. Calculate the Dead-WeightLoss due to the sales tax.

How do you define a productive day : How do you define a productive day - What things do you consider important in motivating and involving people in organisational change?

Calculate the deadweight loss : Suppose the demand and supply for wine within the U.S. is: Suppose the demand and supply for wine in the rest of the world (R.O.W.) is: Calculate the deadweight loss if the U.S. imposes a tariff of 25 cents per bottle of imported wine.

Achieve a common goal or set of goals : Which of the following is best defined as a consciously coordinated social unit, composed of two or more people, which functions on a relatively continuous basis to achieve a common goal or set of goals?

States gained less power relative to the federal government : Over the years, have states gained more or less power relative to the federal government. Please discuss and cite examples to support your argument

User Account

All Pages