Example 5. Maximizing Tax Revenue. Suppose the demand and supply functions for a product are p = 2800-8q-q/3 and p = 400+2q respectively, where p is in dollars and q is the number of units. Find the tax t that will maximize the tax revenue T, and find the maximum tax revenue.

Example 5. Maximizing Tax Revenue. Suppose the demand and supply functions for a product are p = 2800-8q-q/3 and p = 400+2q respectively, where p is in dollars and q is the number of units. Find the tax t that will maximize the tax revenue T, and find the maximum tax revenue.

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Application: The Cost Of Taxation

Section: Chapter Questions

Problem 8PA

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Example 5. Maximizing Tax Revenue.
Suppose the demand and supply functions for a product are p = 2800-8q-q/3 and p = 400+2q respectively,
where p is in dollars and q is the number of units. Find the tax t that will maximize the tax revenue T, and find
the maximum tax revenue.

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