Determine what is the value of the tax revenue

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Reference no: EM13225073

The market demand for product X is given by Qd=8-1/3p and the market supply for good X is given by Qs=p-8, where P=price per unit.

a) Draw a supply and demand graph with these curves. What are the equilibrium price and the equilibrium quantity?

b) A per unit excise tax is imposed on product X, and the market supply with the tax is now given Qs=p-12. add this supply curve to your graph and identify the new equilibrium price and equilbrium quantity. What is the value of the per unit tax? How much of this per unit tax will be paid by consumers and how much will be paid by the producer? What is the value of the tax revenue?

Reference no: EM13225073

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