supplied.00. . Because each customer buys ten gallons each time, each station can serve 50 cars a day. . This exchange does produce a net benefit of the transaction of a nickel. At 12:30, the 50th car gets in line behind 14 others. . (Why not?) There are now two equilibrium prices, the price that buyers pay in equilibrium, and the price sellers receive. . Think of a third alternativefor every tankful of gas you purchase you must give the seller 25, but sellers are forbidden by law to expand total production in the aggregate past. . Without price controls, this time would be available for people to enjoy. . What is the effect of tax? . How can consumers pay Pa per gallon when suppliers receive only.00? . Lets make another guess. . This allows taxi drivers to avoid income tax and sometimes avoid paying the company renting them the cab. Eventually people will start to figure out how many cars get served and will not get in line if they dont think theyll get gas.
Imagine a firm without a cash register. . Your input will help us help the world invest, better! How far will it fall? . This is shown as the quantity Q0 in figure. . This explanation assumes that people are stupid and believe that the physical imposition of the tax determines who really pays. Suppose gas stations open at 9:00. . It seems obvious that they would both increase the price of gasoline by 10, but they do not since the price at the pump will not stay.00. . They will realize they will have to get to the station earlier in order to be one of the cars getting gas. This upward pressure on price pushes price up.00 where it can go no further. . How much revenue does the government have to raise to finance the subsidy payments? But what is weird about this story is who loses the value of the shirts. . But maybe theres another benefit from keeping register tapes, or a cost avoided. .
Supply and Demand, Prius Style wired
Supply, demand, and market equilibrium Microeconomics Khan