23 Jul WHAT IS THE EQUILIBRIUM PRICE AND QUANTITY OF MARTIN GUITARS?
I need help with an economics problem. I found answers to this problem on the web and chegg but am u Show more I need help with an economics problem. I found answers to this problem on the web and chegg but am uncertain of the answers. Anyone out there know how to solve these and double check the answers? Need answers asap. If your answer is first explained and correct I will choose yours as best answer. Thanks! 4. (48 total points) Suppose you are hired by the Martin guitar company as an economic consultant. You estimate the demand for Martin guitars to be Q = 9000 6P. a) (6 points) Suppose the supply of Martin Guitars is given by Q = -3000 +9P. What is the equilibrium price and quantity of Martin guitars? Equilibrium price: $800 Quantity: 4200 b) (6 points) What is the price elasticity of demand at the equilibrium price and quantity? Price elasticity of demand at equilibrium: -1.143 c) (6 points) What is the price elasticity of supply at the equilibrium price and quantity? Price elasticity of supply at equilibrium: 1.714 For the next three questions suppose a per-unit excise tax of $90 per guitar is levied on the consumers. d) (6 points) What price will consumers pay after the tax is levied? price the consumers will pay after the tax is levied: $854. e) (6 points) What proportion of the tax will be paid by the suppliers of Martin guitars? The supplier will indirectly pay $36 for the tax. f) (6 points) How many guitars will be sold after the tax is imposed? 3876 guitars will be sold after the tax is imposed. g) (6 points) How much consumer surplus do consumers get after the tax? consumer deficit in the amount of $209304. Show less
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