Question 1107584
Look first at the equilibrium price
0.09q+50=0.07q +65
0.02q=15
q=750, with P of 0.07(750)+65=117.5 (and P of 0.09(750)+50=117.5)
The equilibrium price is 117.50 and the demand and supply are both 750.
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The revenue is 117.5*750=$88,125
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If a tax of 1.5 is imposed, then supply function is p-1.5=0.09q+50
p=0.09q+51.5
now set them equal
0.09q+51.5=0.07q+65
0.02q=13.5
q=675
=
0.07(675)+65=112.25, so the new equilibrium price has fallen.
The revenue is $75,937.50