Assume that the demand function is given by x=P^-n, and the supply function by y= p^e. Find the equilibrium price. Determine the effect on the equilibrium price of the introduction of a tax t=0.1 if n= e=0.5. Finally, describe how the incidence of the tax is divided between the consumers and producers.© BrainMass Inc. brainmass.com October 10, 2019, 1:50 am ad1c9bdddf
Now total revenue is:
And marginal revenue ...
This tutorial advises how the incidence of the tax is divided between the consumers and producers.