document.write( "Question 1107584: 2. Let P = 0.09q + 50 be the supply equation for a manufacturer. The demand equation for his product is:
\n" ); document.write( "P = 0.07q + 65\r
\n" ); document.write( "\n" ); document.write( "i. If a tax of N1.50/unit is to be imposed on the manufacturer, how will the original equilibrium price be affected if the demand remains the same?\r
\n" ); document.write( "\n" ); document.write( "ii. Determine the total revenue obtained by the manufacturer at the equilibrium point, both before and after the tax.\r
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Algebra.Com's Answer #722640 by Boreal(15235)\"\" \"About 
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Look first at the equilibrium price
\n" ); document.write( "0.09q+50=0.07q +65
\n" ); document.write( "0.02q=15
\n" ); document.write( "q=750, with P of 0.07(750)+65=117.5 (and P of 0.09(750)+50=117.5)
\n" ); document.write( "The equilibrium price is 117.50 and the demand and supply are both 750.
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\n" ); document.write( "The revenue is 117.5*750=$88,125
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\n" ); document.write( "\n" ); document.write( "If a tax of 1.5 is imposed, then supply function is p-1.5=0.09q+50
\n" ); document.write( "p=0.09q+51.5
\n" ); document.write( "now set them equal
\n" ); document.write( "0.09q+51.5=0.07q+65
\n" ); document.write( "0.02q=13.5
\n" ); document.write( "q=675
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\n" ); document.write( "0.07(675)+65=112.25, so the new equilibrium price has fallen.
\n" ); document.write( "The revenue is $75,937.50
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