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Using the Graph Shown,answer the Following Questions

question 430

Essay

Using the graph shown,answer the following questions.
What was the equilibrium price in this market before the tax?
What is the amount of the tax?
How much of the tax will the buyers pay?
How much of the tax will the sellers pay?
How much will the buyer pay for the product after the tax is imposed?
How much will the seller receive after the tax is imposed?
As a result of the tax,what has happened to the level of market activity?


Definitions:

Market Price

The current price at which an asset or service can be bought or sold, determined by the supply and demand dynamics in the marketplace.

Price-Taker Firm

A company that has no control over the market price and must accept the prevailing market price for its product or service.

Price-Taker Model

A market situation where individual firms do not have the power to set prices for their products, instead accepting the market price.

Market Price

The present rate at which an asset or service is being offered for sale or purchase in the open market.

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