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Sep 26 2013 12:50pm
Explanation and answer too please, :-)

Donation will be given!

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Sep 26 2013 12:56pm
Ok initially the equilibrium is...

set demand = supply

125-5q = 5 + 6q
120 = 12q, q = 10


after tax, buyer sees price 72 higher (he pays 72 in addition to the sell price), seller sees no change in price

new dmeand is p+72 = 125-6q
or p = 53 - 6q

so new equilibrium is
new demand = supply

53-6q = 5 + 6q
12q = 48, q = 4


new equil - old equil quantity = 6
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Sep 26 2013 01:05pm
you got a typo in the first line (I know its a typo since it did not propagate through your work)
125-6q, not 125-5q

This post was edited by Azrad on Sep 26 2013 01:06pm
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Sep 26 2013 02:02pm
Quote (Azrad @ Sep 26 2013 02:05pm)
you got a typo in the first line (I know its a typo since it did not propagate through your work)
125-6q, not 125-5q


Thanks :)

also the last line should be old equil minus new equil quantity :P
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Sep 26 2013 02:03pm
Thanks man!

Ff given!
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