Submit solutions to the following two problems. Submit in an Excel workbook with each problem in a separate worksheet (tab). Show your calculations in Excel. That is, use Excel to make the calculations.
Problem 1
Please be sure to use excel for calculations and to solve the problem. I know how to do the first part and I have the answer to the first part, but I am not sure how to do the graph in excel and how to calculate A & B.
In a competitive market, the industry demand and supply curves are:
P = 200 - .3Qd (Demand)
P = 100 + .4Qs (Supply)
a. Find the market's equilibrium price and output.
b. Suppose the government imposes a tax of $15 per unit of output on all firms in the industry. What effect does this have on the industry supply curve? Find the new competitive price and output. What portion of the tax has been passed on to consumers via a higher price?
c. Suppose a $15-per-unit sales tax is imposed on consumers. What effect does this have on the industry demand curve? Find the new competitive price and output. Compare this answer to your findings in part (b).