Group+4+Taxes

=Group 4: Taxes=

The supply of beef in the United States is defined by the equation: math P = 5 + 2Q_{S} math while the demand is defined by the equation: math P = 20 - \frac{1}{2}Q_{D} math Please answer the following questions about the U.S. beef market.
 * 1) Graph the market supply and demand, making sure to label all key points.
 * 2) What is the equilibrium price and quantity in the beef market.
 * 3) What is the value of consumer surplus at the current market equilibrium?



Now assume that the United States has decided to impose a tax of $5.00 on all sales of beef. * I dont have a graphing calculator but if someone else does just use this info. With a $5 tax, add 5 to every value y value of the supply values. * add 5 to the equation 5+ 2Qs and then equate the two equations * the new equilibrium quantity is 4
 * 1) Graph the resulting equilibrium. Illustrate on your graph the change in consumer surplus, producer surplus, the tax revenue collected, and the deadweight loss associated with the tax.
 * 1) What is the new equilibrium quantity of beef sold on the market.
 * 1) What price do consumers have to pay for beef? What price do producers earn for their beef?


 * 1) What is the elasticity of demand between the original price of beef and the new price of beef? What about the elasticity of supply?
 * 2) How do the elasticity of supply and demand relate to the deadweight loss associated with the tax?