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Ans-18
c(q)=(1/2)(q^2)
Firm's supply- P=MC--> P=q
There are 10 identical firms. so, Industry's supply= Q=10*q=10P
Total Industry's demand Q=100-10P.
At equilibrium, Demand=Supply---> 100-10P=10P----> P*=5
Now Government imposes an excise tax of Rs.2 per unit, to be paid by sellers. This tax is passed on to consumers. suppose consumers paying price per unit= Pd and suppliers earn per unit is Ps,
Suppliers passes this extra tax on consumer so Pd=Ps+2, and Ps=Pd-2
At Ps, supply from industry is Q=10Ps= 10(Pd-2)
At Pd, Demand from consumers is Q=100-10Pd.
At equilibrium, 10(pd-2)=100-10Pd.----> Pd*=6
Now equilibrium price is what demanders pay per unit that is market price per unit.
So answer is (B) 6.
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