ESSAYWrite your answer to the space provided.16) Find A produces 8O unit of a particular good. Pach...

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ESSAYWrite your answer to the space provided.16) Find A produces 8O unit of a particular good. Pach good sells for $ XXXXXXXXXXSuppose file own price elasticity of demand for the good is .0.4 and the price elasticity of supply .13.Compute the slope and intercept coefficients for the linear supply and demand equations the government imposed a per wit tax of $25.00 per good, what would be the new equil.rium price and maantity? c. Would a per unit taxon the good change the revenue received by firm A

David · Accepted Answer

Answer: 
a. 
Price of good (P) =$500 and quantity sold/produced (Q) = 80 
Own price elasticity = -0.4 and price elasticity of supply = 1.5 
Deriving demand function: 
Demand function is given as; 
(P-p’) = (dp/dQ) (Q-Q’) 
We have p’ = $500 and Q’ = 80 
We want (dp/dQ)? 
We have given Own price elasticity = -0.4 i.e. 
(dQ/dP)*(p/Q) = -0.4, implies (dQ/dP) = (0.4Q)/p =(0.4*80)/500= -0.064 
So (dP/dQ) = -1/0.064 = -15.625 
Demand function is given as; 
(P-500) = -15.625 (Q-80) or 
P – 500 = -15.625Q+1250 or 
Demand function: P = 1750  - 15.

ESSAY Write your answer to the space provided. 16) Find A produces 8O unit of a particular good. Pach good sells for $ XXXXXXXXXXSuppose file own price elasticity of demand for the good is .0.4 and...

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