![]() So they're not going to set the price, but they can choose what ![]() ![]() Price right over here, marked with this a dotted line, and as we've talkedĪbout in multiple videos, the firms in that perfectlyĬompetitive market, the perfectly competitive firms, they just have to price takers, so the market price is going to be their marginal revenue curve. Multiple times already, is our supply and our demand curves for our perfectly competitive market, and you can see the equilibrium So what we have on the left-hand side, and we've seen this Perfectly competitive markets in the long run. Both demand and supply are expressed in kilograms (kg), and all prices are in dollars ($).Dig a little bit deeper into what happens in Discuss how the chicken meat market's equilibrium price and quantity are affected by the Government's tax on pork.ĥ: Assume that instead of taxing the meat consumption, the Government puts a tax of 10$ per kilo of pork meat sold.Ħ: Which one of the two policies, a tax on pork meat consumption, or a tax on pork meat production, is more efficient? Why? We assume that the market for pork meat is perfectly competitive.ġ: Compute the equilibrium price P E and quantity Q E.Ģ: Plot on a graph: the demand, the supply, and the equilibrium price and quantity.ģ: Assume that the Government puts a tax of 10$ per kg on all pork meat consumption.Ī) Graphically show the effect of the consumption tax on the equilibrium price and quantity.ī) Compute the price paid by consumers P D, the price received by producers P S, and the quantity traded Q T, after the Government's tax has been instituted.Ĭ) Discuss the welfare implication of the tax.ĭ) Explain who bears most of the tax burden, the consumers or the suppliers? Why?Ĥ: For this question only, we assume that chicken meat is a substitute for pork meat. The demand and the supply for pork meat in Meatistan are given by
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |