Please redo the graphs because I don't believe they are correct as well as the box that says "more". The following graph shows the supply and demand curves for Airbnb rentals in the hypothetical economy of Comfytown in 2010, two years afterAirbnb launched; the equilibrium quantity of rentals was 80 rooms per day, and the equilibrium price was $140 per room. At that time, Comfytownwas enforcing tax regulations on the market for hotels, but it hadn't yet initiated a tax arrangement on room rentals through Alirbnb.On the folowing graph, use the green rectangle (triangle symbols) to indicate the tax revenue the government could have collected in 2010 ir it hadievied a $30-per-room tax on Airbnb rentais. (Note: You will not be graded on your placement of this area on the graph.)200Demandgo10Supply 20e190Potential Tax Reverue180170160 A150140130 A12011010060 80RENTALS (Rooms per day)2040100 120140160180200PRICE (Dollas per rental) Realizing that there is a great potential for increased tax revenue, government officials in Comfytown began discussing how they could align Airbnbrentals with hotel stays from a tax perspective. Fast-forward to 2018, at which time Comfytown has finally made tax arrangements with Airbnb to levya $30-per-room tax on rentals. However, now the market conditions have changed. More hosts have now entered the Airbnb market, and awarenessof this hotel alternative has increased demand. The following graph shows the demand and supply curves for Airbnb rentals in 2018.Use the green rectangle (triangle symbois) to liustrate the area representing the revenue raised by a $30-per-room tax. Then use the black point(cross symbol) to shade the area representing the deadwelght loss generated by this tax.200Demand018190Tax Revenue180170Таx WedgeSupply 2018160Deadweight Loss15014013012011010020406020100120140160180200RENTALS (Rooms per day)The demand for Airbnb rooms has not only shifted to the right, but it has also become relatively moreelastic since 2000.PRICE (Dolars per rental)

The market equilibrium is achieved at the point where the demand curve and the supply curve…

Answered: rentals with hotel stays from a tax…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter4: Demand, Supply, And Market Equilibrium

Section: Chapter Questions

Problem 21P

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