How much per unit is the supplier paid

Reference no: EM131072579

The demand and supply curves in a regular market (no externalities) are given by P = 42-Q and P = 0.2Q.

(a) Solve for the equilibrium price and quantity.

(b) A percentage tax of 100% is now levied on each unit supplied. Hence the form of the new supply curve P = 0.4Q. Find the new market price and quantity.

(d) Compute the producer and consumer surpluses after the imposition of the tax and also the DWL.

Reference no: EM131072579

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