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  • Mathematical Determination of Equilibrium Price and Quantity Using Direct Functions

Calculating Equilibrium with a Per-Unit Tax

Consider a market for a specific good with the following demand and supply functions: Quantity Demanded: Qd=200−4PQ_d = 200 - 4P Quantity Supplied: Qs=−40+8PQ_s = -40 + 8P Where P is the price in dollars.

Now, suppose the government imposes a $3 per-unit tax on the sellers of this good. Calculate the new equilibrium price paid by consumers and the new equilibrium quantity. Show your work.

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