nsider the following supply and demand curves Price = 35-4*Q Price = 3*Q Suppose the government places a 7-dollar tax on producers. Doing so would generate _____ dollars of revenue. Suppose now instead of putting a 7-dollar tax on producers, the government put the 7-dollar tax on consumers. Doing so would generate _______ dollars of revenue. In this case, consumers would pay _____ percent of the tax. Give typed answer ASAP with proper step by ste

nsider the following supply and demand curves Price = 35-4Q Price = 3Q Suppose the government places a 7-dollar tax on producers. Doing so would generate _ dollars of revenue. Suppose now instead of putting a 7-dollar tax on producers, the government put the 7-dollar tax on consumers. Doing so would generate _ dollars of revenue. In this case, consumers would pay ___ percent of the tax. Give typed answer ASAP with proper step by ste

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section5.A: Appendix: Price Elasticity And Tax Incidence

Problem 1AQ

See similar textbooks

Similar questions

Suppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.8 and 0.7 respectively. Suppose the government imposes a per-unit tax of $45 on the cigarette sellers. By how much would buyers share the tax burden respectively? Show your calculation.
If a tax of $1.20 is imposed on consumers in this market, what is the tax revenue?
The demand and supply equations for a product are: Q^d=300-6p and Q^x=-40+6p. . Determine the market Equilibrium and draw graphs. Suppose that the government decides to impose a flat tax of 10% on each unit sold. Show that the price that consumers pay would be the same if the government imposed a tax of Rs. 1.70 per unit sold. Draw graph and explain . Also calculate the total revenue earned by sellers before and after the tax, the tax revenue raised by the government, changes in consumer and producers surplus and dead weight loss
The demand and supply equations for a product are: Q* = 0.2 300 – 6P and Q' = -40 + 6P. Determine the market equilibrium and draw graphs. Suppose that the government decides to impose a flat tax of 10% on each unit sold. Show that the price that consumers pay would be the same if the government imposed a tax of Rs. 1.70 per unit sold. Draw graphs and explain. Also calculate the total revenue earned by sellers before and after the tax, the tax revenue raised by the government, changes in consumer and producers surplus and dead weight loss.
Suppose the government applies a specific tax to a good where the demand elasticity is -0.8, and the supply elasticity is 1.4. If a specific tax of $3.25 was placed on the good, to the arest cent, what is the price increase that consumers would pay? What is the tax incidence? I
Do you think profit could be maintained if the tax burden were simply passed on to the consumers in the form of higher selling price? How will this affect sales? Explain.
Daniel Patrick Moynihan, the late senator from New York, once introduced a bill that would levy a 10,000 percent tax on certain hollow-tipped bullets. A 10,000 percent tax on bullet ___ is not/is___ likely to generate a lot of revenue. Why might Senator Moynihan have proposed it? To boost the manufacturing industry of hollow-tipped bulletsTo raise revenue to support law enforcementTo discourage the use of hollow-tipped bullets
The market for skateboards currently has no taxes. The equilibrium quantity is 5,000/month, and the equilibrium price is $40. The governor is considering placing a $10/skateboard tax on skateboard producers, and expects to raise $50,000/month in revenue. Is the governor correct? O No, because it doesn't matter whether the consumer or producer is taxed. O Yes, because producer and consumer responses will cancel out. O No, because the quantity produced and consumed will fall below 5,000/month once the tax is imposed. O Yes, because 5,000 x $10 = $50,000.
Suppose that the demand for tea in Boston is described by Quantity demanded = 20-p and the quantity supplied = 2p-4. What would be the price paid by consumers if there was a 6 dollar tax on tea?
Suppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.8 and 0.7 respectively. Suppose the government imposes a per-unit tax on the cigarette sellers. Who, buyers or sellers, would share a heavier tax burden? Explain your answers without calculation.
Suppose an economist estimates the price elasticity of demand for sugary drinks is -4.2, while its price elasticity of supply is 1.2. If the government decides to impose a per-unit tax of $9 per can of sugary drinks sold, how would the market price of sugary drinks be affected? Show your calculation
At the current market equilibrium, the price elasticity of supply for a certain good is much lower than the price elasticity of demand. if the government imposes a $5 specific tax on this good, who will bear more of the burden of the tax?