The market for Good X can be depicted with the following demand and supply equations:

Question

Demand: P = 50 – 1/2Q
Supply: P = 1/3Q
Where P is price per unit and Q represents quantity in units. Policy makers plan on imposing a $1 per unit tax on this good.
Question: ( Market for Good X) If this tax is imposed, the price of Good X will increase by:
A) $20.
B) $0.60.
C) $1.00.
D) $1.50.

I don't how to solve?

Answer 1

0.60