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 = 822 + (-8 Q)

Original Supply: P = 202 + 10 Q

An ad valorem tax of 15% is on demand.





























































Answer:

After-tax Demand: P = 714.78260869565 + (-6.9565217391304 Q)

After-tax Supply: P = 202 + 10 Q

Market price: P = 546.44444444444

Market quantity: Q = 34.444444444444

Taxed price: P = 504.41025641026

Taxed quantity: Q = 30.241025641026

Total tax consumer pay: 1016.9255665133

Total tax producer pay: 1271.1569581416

Dead weight loss: DWL = 159.01856673241