Consider a perfectly competitive market where the demand for the good is given by Q=761-5p, where Q denotes the quantity demanded at price p. On the supply side, the industry supply function is given by Q=-8+7p. The government imposes a per-unit tax on consumers equal to t=7.761

Derive the market equilibrium in the presence of this tax. Determine the share of the tax paid by consumers and enter it below. (Remember that you must always enter just a number in decimal form.)

Community Answer

Q){:[Qd=761-5P","quadQ^(S)=-8+7P","],[" at "epsiq^(m)Qd=Q^(S)],[761-5P=-8+7P],[769=12 P],[P=769//12=64.083]:}t=tax=7.761 on consumers, New dd curve,{:[Qd=761-5( ... See the full answer