* M0.GMS introductory model using MCP
* simple supply and demand model (partial equilibrium)

PARAMETERS
 A intercept of supply on the P axis (MC at Q = 0)
 B change in MC in response to Q, this is dP over dQ
 C intercept of demand on the Q axis (demand at P = 0)
 D response of demand to changes in price, dQ over dP
 TAX a tax rate used later for experiments;

A = 2;
C = 6;
B = 1;
D = -1;

POSITIVE VARIABLES
 P
 X;

EQUATIONS
 DEMAND
 SUPPLY;

SUPPLY.. A + B*X =G= P;

DEMAND.. X =G= C + D*P;

MODEL EQUIL /SUPPLY.X, DEMAND.P/;

SOLVE EQUIL USING MCP;

A = 7;
SOLVE EQUIL USING MCP;

A = -7;
SOLVE EQUIL USING MCP;

PARAMETERS
 CONSPRICE consumer price
 PRODPRICE producer price (equal to marginal cost)
 TAXREV tax revenue (note tax base is producer price);

EQUATIONS
 SUPPLY2;

SUPPLY2.. (A + B*X)*(1+TAX) =G= P;

MODEL EQUIL2 /SUPPLY2.X, DEMAND.P/;


A = 2;
TAX = 0;
SOLVE EQUIL2 USING MCP;

TAX = 0.25;
SOLVE EQUIL2 USING MCP;

CONSPRICE = P.L;
PRODPRICE = P.L/(1+TAX);
TAXREV = PRODPRICE*TAX*X.L;
DISPLAY CONSPRICE, PRODPRICE, TAXREV;