Find the equilibrium price and quantity in each of the following markets: i) Qd= 6-2p, Qs=3+p ii) Qd=10-5p, Qs=3+p iii) Qd =1-p, Qs=3+p

Equating quantity demanded to quantity supply, we get:

(i) 6-2p = 3+ p, or

p = 1

Q = 4

(ii)10-5p = 3+p, or

p = 7/6

Q = 25/6

(iii)Equilibrium in this market is not possible as price turns out to be negative when we equate market demand to market supply.

If a tax of 1 cent is levied, then: Pd = 1+ Ps, where Pd is the price paid by consumers and Ps is the price received by suppliers.

(i) 6-2Pd = 3+ Ps, or

6-2(1+Ps) = 3+ Ps,

Ps = 1/3

Pd = 4/3

(ii)10-5(Pd) = 3+Ps,or

10-5(1+Ps) = 3+Ps,or

Ps = 1/3

Pd = 4/3

(iii)Equilibrium in this market is not possible as price turns out to be negative when we equate market demand to market supply.