Answer to Question #116975 in Macroeconomics for Muhammad

Question

A market for electricity is in equilibrium in bangladesh at a point where both supply and demand curves intersect each other. If the following events ( price factors or non price factor of demand or supply) take place into the market of electricity then how it will effect equilibrium point, equilibrium price and equilibrium quantity of electricity in bangaldesh. Use graphical representation for each case seperately to answer your question. Label and interpret each daigram

1.During the new fiscal year, bangladesh govt. Has decided to decrease the proportion of direct personal tax

Answer 1

1. If during the new fiscal year, bangladesh govt. has decided to decrease the proportion of direct personal tax, then the demand will increase, so the equilibrium price and equilibrium quantity of electricity in bangaldesh will increase too.