Network
To find the equilibrium price with a specific tax, we can use the following steps:
Set the demand and supply functions equal to each other to find the equilibrium quantity.
Substitute the equilibrium quantity into either the demand or supply function to find the equilibrium price.
Add the specific tax to the equilibrium price to find the final equilibrium price with the tax.
First, let's find the equilibrium quantity:
P2 + Qd - 9 = 0 (Demand function)
P2 + 12Qs - 5 = 0 (Supply function)
Solving for Qd and Qs:
Qd = 9 - P2
Qs = (P2 + 5) / 12
Setting Qd equal to Qs:
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9 - P2 = (P2 + 5) / 12
108 - 12P2 = P2 + 5
13P2 = 103
P2 = 103 / 13
P2 = 7.92
Now, substitute P2 back into either the demand or supply function to find the equilibrium quantity. Let's use the demand function:
