Answer to Question #62318 in Macroeconomics for Wesakania
Consider a competitive market with demand given by P = 100 - 2Q and supply given by P =
10 + Q.
i. Find competitive equilibrium price and quantity.
ii. Suppose government introduces as per unit tax of t = 15 on producers.
Find the quantity traded in the market after tax.
Find the price paid by consumers and price received by producers after tax. Show your results on a diagram.