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# Calculating equilibrium price and quantity

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Use the following supply and demand functions to answer the questions below:
Qd = 20-2P, Qs = 5+3P

a. Determine the equilibrium price and quantity and illustrate with a graph.
b. The government imposes a tax of \$5.00. Find the new equilibrium price and quantity.
c. Determine the total tax revenue earned by the government.

https://brainmass.com/economics/demand-supply/equilibrium-price-quantity-presence-of-tax-400867

#### Solution Preview

Please refer attached file for the graph.

a. Determine the equilibrium price and quantity and illustrate with a graph.
In equilibrium Qd=Qs
20-2P=5+3P
15=5P
P=3
Qd=20-2*3=14
Qs=5+3*3=14
Equilibrium ...

#### Solution Summary

Solution describes the steps to calculate the equilibrium price and quantity with and without the presence of tax. It also calculates the tax revenue collected by the government.

\$2.19