Homework
I. Explain what would happen to equilibrium price and quantity in the market for Pepsi if the following occurred (be sure to indicate WHY it happens as well):
i. The price of Coke decreases.
ii. Average household income falls from $50,000 to $43,000
iii. There are improvements in soft-drink bottling technology.
iv. The price of sugar increases and the Pepsi launches an extremely successful advertising campaign.
II. Use the following equations for demand and supply to solve for market equilibrium price and quantity:
Demand: Qd = 100 - 4P
Supply: Qs = 10 + 6P
III. Using the diagram below, answer the following questions:
i. How much is the per-unit tax on cigarettes?
ii. What price do consumers pay after the tax?
iii. How much tax revenue is collected?
iv. What is the amount of deadweight loss?
Format your homework according to the following formatting requirements:
i) The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
ii) The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
iii) Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.