question archive There is a coastal community north of San Francisco that has 2,000 houses (there cannot be less than 2,000 houses)
There is a coastal community north of San Francisco that has 2,000 houses (there cannot be less than 2,000 houses)
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There is a coastal community north of San Francisco that has 2,000 houses (there cannot be less than 2,000 houses). At a price of $200,000 area residence would purchase 4,000 homes but if the houses were $800,000 all of the residence would move out of the community. Currently the market price of a house in this area is $500,000 and all 2,000 homes are purchased. However, if the market price increased to $700.000, builders would add 50 homes to the community
(A) What is the linear supply function?
(B) What is the linear demand function?
(C) Assume a 1.5% tax is collected upon property purchase. Graph supply, demand and the tax. Label all intercepts and market equilibrium price and quantity. (include in upload file only)
(D) How much revenue is collected from the tax? Does the tax burden fall on home sellers or buyers? Is there a DWL?
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