The Health Ministry is evaluating the data of the soft beverages market. Demand function: QD=270−4P Supply function: QS=−70+4P Submit answers in two decimal places if you get answers in decimals/fractions (a) Find the Total Surplus. The authority is concerned about the increasing obesity rate in the country. Hence, they have decided to impose a tax of TK 5 per unit on soft drinks. Submit answers in two decimal places if you get answers in decimals/fractions (b) What is the total of new consumer surplus and producer surplus after government intervention?

The Health Ministry is evaluating the data of the soft beverages market. Demand function: QD=270−4P Supply function: QS=−70+4P Submit answers in two decimal places if you get answers in decimals/fractions (a) Find the Total Surplus. The authority is concerned about the increasing obesity rate in the country. Hence, they have decided to impose a tax of TK 5 per unit on soft drinks. Submit answers in two decimal places if you get answers in decimals/fractions (b) What is the total of new consumer surplus and producer surplus after government intervention?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 2SQP

See similar textbooks

Similar questions

In the state of Santa Lucia cigarettes were selling for $8.03 per pack before a $0.25 per pack increase. Last year about 3.8 million pack of cigarettes were sold per month at $8.03 per pack. The price elasticity of demand for cigarette packs is -1.35. How much revenue, in millions of dollars, will be produced each month from this new tax?
To encourage people to stop smoking the government of a country introduces an indirect tax of 20% on the price of cigarettes(Currently 10$ per packet). The price elasticity of demand for cigarettes in the country is estimated to be 0.6. Describe the likely impact the tax will have on a, the demand for cigarettes b, government revenue
The government is considering an increase in the tax on gasoline. They know that the price elasticity of demand for gas is -0.25. The current price is $2.00 per gallon. They are willing to allow the quantity of gas sold to fall by 10%. What would be the approximate tax increase (in cents per gallon) that would lead to a 10% reduction in quantity demanded? Multiple Choice 8 cents 40 cents 80 cents 20 cents 25 cents
Suppose an economist estimates that the price elasticity of supply for red wine is2.4 while its price elasticity of demand is -4.0.If the government decides to impost a per-unit sales tax of $40 per bottle of redwine, how would the market price for red wine be affected? Show yourcalculation.
If the price elasticity of demnd for milk is -0.80, a 16% increase in sales implies a reduction price by ......?
When the U.S. government announced that a domestic mad cow was found in December 2003, analysts estimated that domestic supplies would increase in the short run by 10.4% as many other countries barred U.S. beef. An estimate of the price elasticity of beef demand is - 1.6 (Henderson, 2003). Assuming that only the domestic supply curve shifted, how much would you expect the price to change? If quantity increases by 10.4%, then price will V by % (Enter your response rounded to two decimal places). decrease ceiv increase respot -respot u must c our respot You must re structions to Step 1. Click d Paused Step 2. Read t Step 3. Post re tv 30 MacBook Air 80 DII DD esc F10 F1 F12 F1 F2 F3 F4 F5 F6 F7 FB F9 @ # 2$ * 1 2 3 4. 5 7 8 Q W 11
When the U.S. government announced that a domestic mad cow was found in December 2003, analysts estimated that domestic supplies would increase in the short run by 10.4% as many other countries barred U.S. beef. An estimate of the price elasticity of beef demand is -1.6 (Henderson, 2003). Assuming that only the domestic supply curve shifted, how much would you expect the A price to change? If quantity increases by 10.4%, then price will V by % (Enter your response rounded to two decimal places). Fin eceiv decrease on. increase respot ur respot ou must c Your respot You must re nstructions to Paused Step 1. Click o Step 2. Read Step 3. Post re tv 30 MacBook Air DII DD 80 F12 F9 F10 F7 F8 esc F5 F6 F2 F3 F4 F1 @ # $ & 8 2 3 4 Q W R Y %3D ... この * 00
Worldwide annual sales of smartphones over a two year period were approximately q -4p+3,060 million phones at a selling price of sp per phone. E= (b) In one of the years the actual selling price was $325 per phone. What was the corresponding price elasticity of demand? (Round your answer to two decimal place Interpret your answer. The demand was going by about % per 1% increase in at that price level (c) Use your formula for E to determine the selling price that would have resulted in the largest annual revenue. What would have been the resulting annual revenue? (Round your answer to two decimal places.)
Recently, gas prices have soared across the capital region. When the average gas price rose from $3.60 a gallon to $4.40 a gallon, the region observed a slight decrease in consumption of gasoline from 600 million gallons per year to 590 million gallons per year.Based on this information, what would you estimate that the price elasticity of demand is for gasoline in the Capital region? (The answer could be negative or positive and is not necessarily a whole number).
Investigating the demand for textile in a country X, a researcher observed that the demand for textiles tend to rise by 1.5 per cent with one per cent decrease in the prices of textiles; with the rise in one per cent of per capita GDP, the demand for textiles rise by 0.45 per cent and when food prices increased by one per cent, the demand for textiles contracts by 0.93 per cent. (a) Identify the type of demand elasticities in this case and define them. (b) Which type of elasticity the textile mills should consider significant for business development? (c) How much rise in sales is expected during a festival season by offering 20 per cent discount by textile mills showrooms?
on 18 of 75 The price elasticity of demand for lychee fruit is 1.3, while the price elasticity of supply is 0.7. The incidence of a $0.25 excise tax placed on lychee fruit will be higher for consumers. equal for producers and consumers. nonexistent for both producers and consumers. higher for producers.
The government has increased VAT on some commodities in order to raise revenue. The market for commodity X was at equilibrim before tax at price Ksh. 50 per unit sold and the quantity was 5000 units. Suppose own price elasticity of demand is 0.6 and the elasticity of supply is 1.1 After the government announced tax measures the new market price increased to Ksh. 70 per unit. Calculate the equilibrium price and quantities before tax. Calculate the seller and buyers burden, Explain