The demand and supply functions for three (03) goods are given as follows:Dx = 100-3Px+Py+3PzDy = 80+Px-2Py-PzDz = 120+3Px-Py-4PzSx = -10+PxSy = -20+3PySz = -30+2Pz The equilibrium prices and quantities of all three goods are?The government decides to:a) Impose a 25% Tax on X?b) Impose a 5 Rs /unit Tax on Y?c) Give a 10% subsidy on good z?Analyze the impact of each of these policies separately on equilibrium prices and quantities?Analyze the impact of each of these policies separately on equilibrium prices and quantities?Provide theoretical justification (using diagrams) of all results obtained?

Consumers are willing to buy goods and services at market prices this reflects demand. Meanwhile,…

Answered: The demand and supply functions for…

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter4: Markets In Action

Section: Chapter Questions

Problem 6SQ

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The demand and supply functions for three (03) goods are given as follows:

D_x = 100-3P_x+P_y+3P_z

D_y = 80+P_x-2P_y-P_z

D_z = 120+3P_x-P_y-4P_z

S_x = -10+P_x

S_y = -20+3P_y

S_z = -30+2P_z

The equilibrium prices and quantities of all three goods are?
The government decides to:
- a) Impose a 25% Tax on X?
- b) Impose a 5 Rs /unit Tax on Y?
- c) Give a 10% subsidy on good z?
Analyze the impact of each of these policies separately on equilibrium prices and quantities?
Analyze the impact of each of these policies separately on equilibrium prices and quantities?
Provide theoretical justification (using diagrams) of all results obtained?

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