A sales tax is levied on buyers with a tax rate of t, i.e., the real price paid by buyers is (1+t)P. Find the new equilibrium market price and quantity.Write out the tax revenue function and find the maximum revenue.
Coursework For a market, assume that the supply function is given by QS = 0.5P – 10 and the demand function is given by QD = 80 – 0.5P. Write out the inverse supply and demand functions. Find the equilibrium market price and quantity. A sales tax is levied on buyers with a tax rate […]