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(solution) Consider the market for laptop computers. The demand for laptops


Consider the market for laptop computers. The demand for laptops is Q=1800-3P. Suppose the supply of laptops is given by Q=-200+2P

1-What is the equilibrium price of laptops?

2-What is the equilibrium quantity of laptops?

3-What is the price elasticity of demand at the equilibrium price and quantity?

4-What is the price elasticity of supply at the equilibrium price and quantity?


5-for the next seven questions, suppose a per unit excise tax of $80 per guitar is levied on the consumers.

6-What price will sellers receive after the tax is levied?

7-What price will consumers pay after the tax is levied?

8-What percent of the tax will be paid by the consumers of laptops?

9-What percent of the tax will be paid by the suppliers of laptops?

10-How many guitars will be sold after the tax is imposed?

11-How much consumer surplus do consumers get after the tax?

12-What is the deadweight loss created by this tax?



Q1 Answer

 

At equilibrium Demand (D) = Supply(S)

 

But D=Q=1800-3P and S=Q=200+2P

 

Therefore, 1800-3P=200+2P

 

1800-200=2P+3P

 

1600=5P

 

P= $320

 

Q2 Answer

 

Equilibrium Quantity of laptops=

 

Q=1800-3P or...

 


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