question archive There are 10,000 identical individuals in the market of commodity X, each with a demand function given by Qdx = 12 - 2Px, and 1,000 identical producers of commodity X, each with a function given by Qsx = 20Px, where Qdx is an individual's quantity demanded, Qsx is a single producer's quantity supplied, and Px is the price of the commodity
There are 10,000 identical individuals in the market of commodity X, each with a demand function given by Qdx = 12 - 2Px, and 1,000 identical producers of commodity X, each with a function given by Qsx = 20Px, where Qdx is an individual's quantity demanded, Qsx is a single producer's quantity supplied, and Px is the price of the commodity
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There are 10,000 identical individuals in the market of commodity X, each with a demand function given by Qdx = 12 - 2Px, and 1,000 identical producers of commodity X, each with a function given by Qsx = 20Px, where Qdx is an individual's quantity demanded, Qsx is a single producer's quantity supplied, and Px is the price of the commodity.
Suppose that from the condition of equilibrium above, the government decides to collect an excise tax of $2 per unit produced, from each of the 1000 identical producers of commodity X
a. What effect does this have on the supply of commodity X?
b. What is the effect on the equilibrium price and quantity of commodity X?
c. Who actually pays the tax?
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