Problem 6 Consider a market that sells individual marbles. Qs=2+2*P Qd=11-P   A $3 tax on consumers is levied for every marble bought. Plot the quantity supplied, quantity demanded before tax, and quantity demanded after tax (3 different lines).

Algebra for College Students
10th Edition
ISBN:9781285195780
Author:Jerome E. Kaufmann, Karen L. Schwitters
Publisher:Jerome E. Kaufmann, Karen L. Schwitters
Chapter2: Equations, Inequalities, And Problem Solving
Section2.3: Equations Involving Decimals And Problem Solving
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Problem 6
Consider a market that sells individual marbles.
Qs=2+2*P
Qd=11-P
 
A $3 tax on consumers is levied for every marble bought. Plot the quantity supplied, quantity
demanded before tax, and quantity demanded after tax (3 different lines).
 

Problem 7
Refer to problem 6. Calculate the deadweight loss caused by tax.
 

Problem 8
Refer to Problem 7. The consumer tax was realized to have been a terrible idea for the marble
industry. The tax is removed and in an effort to make up for past losses, there is now a $1.5
subsidy per marble. Calculate the deadweight loss.
 

 

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