EFFECT OF A TAX ON BUYERS AND SELLERS The following graph shows the daily market for jeans. Suppose the government institutes a tax of $11.60 per pair. This places a wedge between theprice buyers pay and the price sellers receive.(?504540Supply3530Tax Wedge25201510Demand102030405060708090100QUANTITY (Pairs of jeans)PRICE (Dollars per pair)~) Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax.QuantityPrice Buyers PayPrice Sellers Receive(Pairs of jeans)(Dollars per pair)(Dollars per pair)Before TaxAfter TaxUsing the data you entered in the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the priceelasticity of demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table.Tax Burden(Dollars per pair)ElasticityBuyerslessSellersmoreThe burden of the tax falls more heavily on theelastic side of the market.

In a free market the price and quantity is determined by the forces of demand and supply. The point…

Answered: The following graph shows the daily…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter19: Elasticity

Section: Chapter Questions

Problem 4QP

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There is a shortage of college basketball and football tickets for some games, and a surplus occurs for other games. The following graph shows the market for the football team home games. Suppose that your favorite football team has a stadium that seats 25,000 people and that for every game during the season, the football team administrators charge $15 for tickets. The demand curve for the tickets for the top-of-the-league games is labeled DTop, and the demand curve for the tickets for the low-ranked games is labeled D Low. On the following graph, use the green points (triangle symbol) to plot the supply curve for the tickets for the football team home game. Then use the grey points (star symbol) to plot the demand curve according to the team administrators. PRICE (Dollars per ticket) 99 NOGOMETNO 0 10 The price of $15 per tickets will result in 20 30 40 QUANTITY (Thousands of tickets) DLOW The number of tickets demanded will be I exceeds the quantity of tickets 50 D TOP 60 tickets…
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