Suppose that the demand curve for a particular commodity is


Question: Suppose that the demand curve for a particular commodity is QD = a - bP, where QD is the quantity demanded, P is the price, and a and b are constants. The supply curve for the commodity is Qs = c + dP, where Qs is quantity supplied and c and d am constants. Find the equilibrium price and output as functions of the constants a, b, c, and d. Suppose now that a unit tax of u dollars is imposed on the commodity. Show that the new equilibrium is the same regardless of whether the tax is imposed on producers or buyers of the commodity.

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Finance Basics: Suppose that the demand curve for a particular commodity is
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