Answer to Question #272971 in Math for Thelma 22

Question

a) Suppose consumers will demand 40 units of a product when the price is K12 per unit

and 25 units when the price is K18 each. Find the demand equation assuming that it is

linear. Find the price per unit when 30 units are demanded. [3]

b) Let

50

100

5

P = q +

be the supply equation for a manufacturer’s product and suppose

the demand equation is

65

100

7

P = − q + .

i. If a tax of K1.50 per unit is imposed on the manufacturer, how will the original

equilibrium price be affected if the demand remains the same? [5]

ii. Determine the total revenue obtained by the manufacturer at the equilibrium

point both before and after the tax [2]