Suppose the equation for the demand curve for some product X is P - 8.docx

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Suppose the equation for the demand curve for some product X is P = 8 0.6 Q and the supply curve is P = 2 + 0.4 Q . a. What is the equilibrium price? b. What is the equilibrium quantity? c. Now suppose a tax is imposed on X such that the new supply equation is P = 4 + 0.4 Q . How much tax revenue will this tax yield the government? .

Suppose the equation for the demand curve for some product X is P = 8 0.6 Q and the supply
curve is P = 2 + 0.4 Q .
a. What is the equilibrium price?
b. What is the equilibrium quantity?
c. Now suppose a tax is imposed on X such that the new supply equation is P = 4 + 0.4 Q . How
much tax revenue will this tax yield the government?

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