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The Following Graph Shows the Demand and Supply for I-Pods

Question 11

Essay

The following graph shows the demand and supply for i-Pods. The following graph shows the demand and supply for i-Pods. a) What is equilibrium price and quantity? b) Suppose that a $20 per unit sales tax is placed on the product. Draw in the new supply curve labeled S<sub>tax</sub>. c) What is the new equilibrium price and quantity? d) What proportion of the tax is paid by the consumer, and what proportion is paid by the seller in this case? a) What is equilibrium price and quantity?
b) Suppose that a $20 per unit sales tax is placed on the product. Draw in the new supply curve labeled Stax.
c) What is the new equilibrium price and quantity?
d) What proportion of the tax is paid by the consumer, and what proportion is paid by the seller in this case?

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a) $60 and 200
b) Se...

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