The following is the demand and supply quantities for Firm X at different price points. The company manufactures shoes and is based out of Agra. Earlier, its factory was based within a peripheral distance of 1.5 km of the Taj Mahal, and because of government interventions, the factory had to relocate. The pollution emitted by the factory was causing permanent damage to the porous marble that was used for constructing the Taj Mahal.Price (cost per unit) (in ₹)Quantity demanded (in thousands)Quantity supplied (pre-environment tax) (in thousands)Quantity supplied (post-environment tax) (in thousands)1075035032515675400375205604754502549051549030360570545 What is Firm X’s new equilibrium price and new equilibrium quantity, respectively, after taking into account the environment tax?₹25 and 490,000₹20 and 560,000₹15 and 675,000₹30 and 360,000
Question
The following is the demand and supply quantities for Firm X at different price points. The company manufactures shoes and is based out of Agra. Earlier, its factory was based within a peripheral distance of 1.5 km of the Taj Mahal, and because of government interventions, the factory had to relocate. The pollution emitted by the factory was causing permanent damage to the porous marble that was used for constructing the Taj Mahal.Price (cost per unit) (in ₹)Quantity demanded (in thousands)Quantity supplied (pre-environment tax) (in thousands)Quantity supplied (post-environment tax) (in thousands)1075035032515675400375205604754502549051549030360570545 What is Firm X’s new equilibrium price and new equilibrium quantity, respectively, after taking into account the environment tax?₹25 and 490,000₹20 and 560,000₹15 and 675,000₹30 and 360,000
Solution
The equilibrium price and quantity are determined where the quantity demanded equals the quantity supplied. After the environment tax, we need to look at the "Quantity supplied (post-environment tax)" column.
Looking at the table, we can see that the quantity demanded equals the quantity supplied at a price of ₹20 per unit, with a quantity of 560,000 units.
So, the new equilibrium price and quantity, respectively, after taking into account the environment tax are ₹20 and 560,000.
Similar Questions
The following is the demand and supply quantities for Firm X at different price points.Price (cost per unit) (in ₹)Quantity demanded (in thousands)Quantity supplied (pre-environment tax) (in thousands)Quantity supplied (post-environment tax) (in thousands)1075035032515675400375205604754502549051549030360570545 How did the supply curve of Firm X react to the environment tax? The supply curve shifted to the rightThe supply curve shifted to the leftThe supply curve remained unchanged
The Total of factory cost and office overhead is called. (कारखाना लागत एवं कार्यालय उपरिव्यय के योग को निम्न में से क्या कहते हैं?)a.Factory Cost (कारखाना लागत)b.Cost of Production (उत्पादन लागत)c.Direct Cost (प्रत्यक्ष लागत)d.None of the above (उपर्युक्त में कोई नहीं)
The factory overhead are recovered on the basis of. (कारखाना उपरिव्यय निम्न में से किस आधार पर वसूल किये जाते हैं?)a.Direct Materials (प्रत्यक्ष सामग्री)b.Direct Wages (प्रत्यक्ष श्रम)c.Prime Cost (मूल लागत)d.Factory Cost (कारखाना लागत)
The Taj Mahal in India is affected by
Today, doing business is not easy for businessmen, as they are not used to competition. In the past they were selling whatever .....(17)......produced and at their desired price. But, (18)... the competition has increased over the years, customers started to ....(19).....and choose. Imports have become.....(20)....available and that too at cheaper .......(21)...........
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