Taxation Practice Problems

This website automatically generates ad valorem problems. There is no limit to how many problems you can try. Press the "Refresh" button on your browser to generate a new problem. Website designed by my student Alex Gan.

Problem:

Original Demand: P = 520 + (-10 Q)

Original Supply: P = 11 + 9 Q

An ad valorem tax of 33% is on demand.





























































Answer:

After-tax Demand: P = 390.97744360902 + (-7.5187969924812 Q)

After-tax Supply: P = 11 + 9 Q

Market price: P = 252.10526315789

Market quantity: Q = 26.789473684211

Taxed price: P = 218.02457897132

Taxed quantity: Q = 23.002730996814

Total tax consumer pay: 871.05423392338

Total tax producer pay: 783.94881053104

Dead weight loss: DWL = 136.22449171525