In a perfectly competitive market the demand and supply functions for a product is given by
3- In a perfectly competitive market the demand and supply functions for a product is given by
?? = 200 − 4?
?? = −100 + 6?
Now suppose that the government taxes the good by a unit tax of 5TL.
a) Find the price that demanders pay and the price that suppliers receive when buyers are
responsible to pay for the tax. Find the total tax collection and the deadweight loss from
this taxation policy. Show your analysis explicitly on a graph. (15 Pts)
b) Find the price that demanders pay and the price that suppliers receive when sellers are
responsible to pay for the tax. Find the total tax collection and the deadweight loss from
this taxation policy. Show your analysis explicitly on a graph. (15 Pts)
