Suppose the 2005-2007 short run demand for oil, in billions of barrels, can be expressed as Q=35.5 - 0.03P and the short run supply can be expressed as Q = 32 + 0.04P. Suppose the government imposes a tax of $5 per barrel. What is the market equilibrium quantity before and after the tax?

0 votes
    The equilibrium quantity was 34 billion barrels before the tax and 30.1 billion barrels after the tax.
     The equilibrium quantity was 34.0 billion barrels and there was no change in the amount consumed after the tax.
     The equilibrium quantity was 34 billion barrels before the tax and 33.9 billion barrels after the tax.
     The equilibrium quantity was 34 billion barrels before the tax and 32.2 billion barrels after the tax.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

0 votes
The equilibrium quantity was 34 billion barrels before the tax and 33.9 billion barrels after the tax.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)

Related questions




...