The inverse demand function for cigarettes is given by P(q) = 186 – 6q where q is the quantity of packs of cigarettes that are sold. The inverse supply function is given by P(q) = 90 + 2q. In the past, cigarettes were not taxed, but now a tax of $32 per pack has been introduced. What is the total tax revenue collected by the government?
Read DetailsThe inverse demand for oranges is defined by P(q) = 282 – 9q, where q is the number of units sold. The inverse supply functions is defined by P(q) = 7 + 2q. A tax of $22 is imposed on suppliers for each of orange sold. What is the price paid by consumers after the tax is imposed?
Read DetailsSuppose a firm has a monopoly over the sale of smartwatches in the U.S. The inverse demand for smartwatches in Florida is given by P1(q1) = 170 – 2q1, and the inverse demand in New York is given by P2(q2) = 280 – 5q2, where q1 and q2 are the total output of smartwatches sold in Florida and New York, respectively. The demand for smartwatches in each market is observable to the monopolist. The firm has a constant marginal cost of $50 and zero fixed costs. Assume that the firm can charge different prices in each market. What is the profit-maximizing quantity sold to consumers in the New York market?
Read DetailsThe inverse demand function for cigarettes is given by P(q) = 186 – 6q where q is the quantity of packs of cigarettes that are sold. The inverse supply function is given by P(q) = 90 + 2q. In the past, cigarettes were not taxed, but now a tax of $32 per pack has been introduced. What is the effect of the tax on the equilibrium quantity of cigarettes supplied?
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