SOLUTION: Suppose you are given the following information Qs = 100+ 3p Qd= 400 – 2p Where Qs is the quantity supplied, Qd is the quantity demanded and P is the price. 1) From the inf

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Question 919211: Suppose you are given the following information
Qs = 100+ 3p
Qd= 400 – 2p
Where Qs is the quantity supplied, Qd is the quantity demanded and P is the price.
1) From the information compute equilibrium price and quantity.
2) Now suppose that a tax is placed on buyers so that the Qd =400-(2p+T) where T is taxes. If T = 15, solve for the equilibrium new price and quantity.

Answer by MathLover1(20850)   (Show Source): You can put this solution on YOUR website!

Supply and demand are in equilibrium when . In your case:
1. to find the equilibrium price, solve the two equations simultaneously:


=>





Equilibrium price is $
To find the equilibrium quantity, substitute equilibrium price into the equations:


You'll know if your answer is correct if both equilibrium quantities for supply and demand are the same, which in this case is .
2) Now suppose that a tax is placed on buyers so that the where T is taxes. If , solve for the equilibrium new price and quantity.




(receive sellers)
(pay buyers)
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