**Contents**show

## How do you find equilibrium quantity with tax?

Rewrite the demand and supply equation as P = 20 – Q and P = Q/3. With $4 tax on producers, the supply curve after tax is P = Q/3 + 4. Hence, the new equilibrium quantity after tax can be found from **equating P = Q/3 + 4 and P = 20 – Q**, so Q/3 + 4 = 20 – Q, which gives QT = 12.

## What was the equilibrium price before the implementation of the tax?

Before the tax is implemented, the equilibrium price and quantity occur **at the intersection of the demand and the supply curves**. Therefore, the price consumers pay and producers receive before the tax must be $27.50, and the equilibrium quantity of pinckneys is 4.5.

## What are the equilibrium price and quantity of Frisbees?

a. The equilibrium price of **Frisbees is $8** and the equilibrium quantity is six million Frisbees. b. With a price floor of $10, the new market price is $10 because the price floor is binding.

…

Price per Frisbee | Quantity Demanded | Quantity Supplied |
---|---|---|

$11 | 1 million Frisbees | 15 million Frisbees |

10 | 2 | 12 |

9 | 4 | 9 |

8 | 6 | 6 |

## Which tax better conforms to the principle of equality in taxation?

It appears that under plan 3 the principle of ‘fairness’ is violated. However, the modern system of progressive personal income tax seems to be based on the notion of vertical equity. Other things being equal, **progressive taxes** are seen as ‘good’ taxes in some ethical sense while regressive taxes are seen as -bad’.

## What is the amount of the tax per unit?

The tax per unit is **the difference between the price the buyers pay after the tax and the price the sellers receive after the tax**. In this case, the tax is ($2.50 − $1.75 =) $0.75 per unit.

## How do you find the new equilibrium price and quantity?

**Here is how to find the equilibrium price of a product:**

- Use the supply function for quantity. You use the supply formula, Qs = x + yP, to find the supply line algebraically or on a graph. …
- Use the demand function for quantity. …
- Set the two quantities equal in terms of price. …
- Solve for the equilibrium price.

## When there is a tax on buyers of a good?

A tax on a good **raises the price buyers pay, lowers the price sellers receive, and reduces the quantity sold**. 7. The burden of a tax is divided between buyers and sellers depending on the elasticity of demand and supply.