Quantitative Analysis of Taxes

6. Introduction to Taxes and Subsidies / Quantitative Analysis of Taxes / Problem 4

Problem 4

If the original supply equation is Qs = 5P - 15 and a \$3 tax is imposed on suppliers, derive the new supply equation.

Qs = 5(P - 3) - 15

Qs = 5P - 12

Qs = 5P - 18

Qs = 5(P + 3) - 15