Suppose that instead of a supply-demand diagram, you are given the following information:
Q_s = 100 + P
Q_d = 500- 4P
From this information, compute the equilibrium price (P) and quantity (Q).
Now suppose that a tax (T) is placed on sellers so that
Q_s = 100 + (P -T).
If T = 20, solve for the new equilibrium price and quantity. (Note: P-T is the price received by sellers and P is the price paid by buyers.) Compare these answers for equilibrium price and quantity with your first answers. What does this show you?

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The Answer of Suppose that instead of a supply-demand diagram, you are given the following information: Q_s = 100 + P Q_d = 500- 4P From this information, compute the equilibrium price (P) and quantity (Q). Now suppose that a tax (T) is placed on sellers so that Q_s = 100 + (P -T). If T = 20, solve for the new equilibrium price and quantity. (Note: P-T is the price received by sellers and P is the price paid by buyers.) Compare these answers for equilibrium price and quantity with your first answers. What does this show you?

Suppose That Instead of a Supply-Demand Diagram, You Are Given