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The demand function for video games




(i) The demand function for video games is;q = 120 ? 0.5p;where q is the quantity, and p is the price in dollars.;a. Calculate the inverse demand function.;The inverse supply function is;p = 3 + q;The government levies a $6 tax on each video game purchased.;b. Calculate the change in consumer and producer surplus as a result of the tax. Which falls by more?;c. What is the smallest tax per unit that will result in no video games being bought or sold?


Paper#28059 | Written in 18-Jul-2015

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