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Elasticity of demand at the equilibrium price

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The demand curve for a good is given by the equation P = 100 - 0.001Q and the supply curve is given by the equation P = 20 + 0.004Q, where P represents the price of the good (measured in dollars per unit) and Q represents the quantity of the good (measured in units per week).

a. Find the equilibrium price and quantity for this market.

b. What is the elasticity of demand at the equilibrium price and quantity?

c. Suppose the government imposes a sales tax of $15 per unit on this good. Find the new equilibrium quantity and price.

d. With the tax, what do buyers pay per unit? What do sellers receive per unit?

e. What percentage of the tax is paid by buyers and what percentage is paid by suppliers?

Reference no: EM132648817

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