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2 years ago

Suppose demand and supply are given by

Business

2 answers:

Vika [28.1K]2 years ago

5 0

Answer:

a. price is $60, quantity is 14.

b. price is $36; quantity is 8

c. $96

Explanation:

A) Equilibrium is when demand is equal to supply

Demand: QXd = 14 - (1/2)PX must be equal to Supply: QXs = (1/4)PX – 1

14 - (1/2)PX = (1/4)PX – 1

- (1/2)PX – (1/4)PX = 1-14

- (1/4)PX = -15

Dividing both sides of the equation with - 1/4, we get

PX = 60.

Price at equilibrium is 60.

Substituting PX=60, into the Supply equation to get the Quantity at equilibrium:

QXs = (1/4)PX – 1

QXs = (1/4)(60) – 1

= 15 – 1

= 14

Quantity at equilibrium is 14.

(please see attachment for graph) EQUILIBRIUM A

B) A $12 excise tax will result in a decrease in demand and supply will remain the same.

QXd = 14 - (1/2)PX + 12

=26 – (1/2)PX

The new equilibrium price and quantity will therefore be:

26 - (1/2) PX = (1/4)PX – 1

(-1/2 -1/4) PX = -26 – 1

-3/4 PX = -27

Dividing both sides by -3/4, we get:

PX = 36

Substituting the new equilibrium price, into the supply equation

(1/4)PX – 1

1/4) (36) – 1 = 8

New equilibrium quantity is 8.

(Please see attached for graph) (EQUILIBRIUM B)

C) Since an excise tax is collected on each unit sold, the amount of revenue received by the government is the amount of the tax multiplied by the quantity sold. Revenue earned by the government from a $12 tax is $12 * 8 = $96.

hodyreva [135]2 years ago

3 0

Answer:

a. Price = $20, Quantity = 4 units

b. Price = $12, Quantity = 2 units

c. Tax revenue = $24

Explanation:

Please see Attachment_1 for part a.

Please see Attachment_2 for part b and part c.

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Answer:

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Explanation:

Step 1: Determine the initial stock price

Use the expression below to determine the total initial stock price as shown;

T=S×s

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s=number of shares

In our case;

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replacing;

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Use the expression below;

F=f×s2

where;

F=final stock price=$2,000

f=final stock price per stock=(x-10)

s2=final number of shares bought=(2,000/x)+10

replacing;

2,000=(x-10){(2,000/x)+10)

2,000=x(2,000/x)+(10 x)-10(2,000/x)-100

(2,000=2,000+10 x-20,000/x-100)x

2,000 x=2,000 x+10 x²-20,000-100 x

2,000 x-2000 x=10 x²-100 x-20,000

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solving quadratically;

x=[100±√{100²-(4×10×-20,000)}]/(2×10)

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3 years ago

Kara wants to build a business. She has plenty of capital and potential investors and partners. She wants to avoid the burden of

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Answer:

The correct answer is B.

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The fact that Kara has plenty of capital means she most likely would not need financial intervention from any other party.

It is not logical for her to bring in a partner who will share profits when she has invested all the capital. Because she will enjoy all the proceeds from the business alone, she will also bear all liabilities.

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3 years ago

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