The are 10,000 identical individual buyers in the market for commodity X, each with a demand
Published at : 14 Nov 2020
The are 10,000 identical individual buyers in the market for commodity X, each with a demand fucntion given by Qdx=12-2Px and 1,000 indentical producers of commodity X, each with a supply function given by Qsx=20Px. (i) Find the market demand function and the market supply function for commodity X. (ii) Obtain the equilibrium price and equilibrium quantity. (iii) Suppose the government decides to collect a tax of rupee 2 per unit sold from each of the 1,000 sellers of commodity X. What effect will this have on the equilibrium price and quantity of commodity X?