The inverse demand function for apples in a country Dictatorestan is defined by the equation p = 214 - 5 q, where q is the number of units sold. The inverse supply function is defined by p = 7+ 4q. Suppose that the government of Dictatorestan is interested in maximizing its tax revenue. Find the quantity tax rate it should impose on apples.

The inverse demand function for apples in a country Dictatorestan is defined by the equation p = 214 - 5 q, where q is the number of units sold. The inverse supply function is defined by p = 7+ 4q. Suppose that the government of Dictatorestan is interested in maximizing its tax revenue. Find the quantity tax rate it should impose on apples.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section5.A: Appendix: Price Elasticity And Tax Incidence

Problem 1AQ

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