The following demand and supply functions for a share are:
1.
a) Calculate the equilibrium price and quantity, algebraically and graphically.
b) For the market described by the demand and supply equation system (3.3), the government imposes an excise tax of $120 per transaction. Calculate the equilibrium price and quantity when the tax is imposed. What is the distribution of the tax? Is the tax efficient?
2.
Briefly explain why economists say a tax like the one in Qu1 is inefficient? In your answer, briefly discuss the unemployment and welfare implications of taxation.
***and also can you explan with a curve for me?
It is because my first time to study economics.
Thanks.
1.
a) Calculate the equilibrium price and quantity, algebraically and graphically.
b) For the market described by the demand and supply equation system (3.3), the government imposes an excise tax of $120 per transaction. Calculate the equilibrium price and quantity when the tax is imposed. What is the distribution of the tax? Is the tax efficient?
2.
Briefly explain why economists say a tax like the one in Qu1 is inefficient? In your answer, briefly discuss the unemployment and welfare implications of taxation.
***and also can you explan with a curve for me?
It is because my first time to study economics.
Thanks.