QD, X = 32 – 2*PX – PY
QS, X = -4 + 2*(PX – tX) where tX is the per unit tax rate on production of X.
QD, Y = 46 – 2*PY – 2*PX
QS, Y = -2 + (PY – tY) where tY is the per unit tax rate on production of Y.
Start with a situation of no taxes, so tX = tY = 0.
these goods are compliments
market clearing equation Px=9-0.25Py
market clearing equation Py=16-2/3Px
what is consumer surplus of X?
Producer surplus of X?
Welfare of X?
COnsumer surplus of Y?
producer Surplus of Y?
welfare of Y?
total welfare for X & Y