I've been given the below supply and demand functions:


I've answered the first few questions, which include finding the equilibrium etc, and inverting the above:


Now it says the price is 1/unit and the government introduces a tax on the production of t per unit. It also says "after these changes, the demand function remains the same, but the new inverse supply function is $p^s(q)= 1+t$

The part I'm stuck on is where it asks for a function of the total tax collected $T$, in terms of $t$. I assume that $~T=q^d*t$, so do I just sub $p=1+t$ into my original demand equation for $q^d$ then multiply that by $t$ for the answer?



  • $\begingroup$ $p^d(q)$ should be $\frac{1200}{q+100}$ $\endgroup$ Mar 22, 2019 at 0:04
  • $\begingroup$ Thanks, not sure how that made its way in there $\endgroup$
    – tom982
    Mar 25, 2019 at 19:37


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