a. What is the equilibrium price buyers pay directly to the sellers? b. After paying the tax, what is the total amount buyers pay per unit? $[ c. With the tax, what is the equilibrium quantity? units (Report your answer as a whole number without rounding) d. How much revenue does the government earn from the tax? $ (Round your answer to a whole number)

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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($) Price
90 $90.00
80
70
60
50
40
30
20
10
0
$50.00
1.0 2.0 3.0 4.0
9
S
5.0 6.0 7.0 8.0 9.0
c. With the tax, what is the equilibrium quantity?
Quantity
(thousands per week)
units
(Report your answer as a whole number without rounding)
Taxiposal un
d. How much revenue does the government earn from the tax? $
(Round your answer to a whole number)
Exise Tax (0-$20)
Demand
Perfectly
Inste
Supply
Bane
CALCULATIONS
No Tax
With Tax
Supply
Revely lastic
Perfectly c
Demand
Price Pla
$50,00
$50.00
0.00
Relatively
Fat
Perfectly
Elaine
Quantity
Instructions: Set demand relatively inelastic such that the X Intercept of the demand curve is 6 (this corresponds to a vertical intercept
of 150), supply relatively elastic such that the vertical intercept is $10, and impose a $11.00 excise tax on buyers.
a. What is the equilibrium price buyers pay directly to the sellers? $[
b. After paying the tax, what is the total amount buyers pay per unit? $[
4.000
4,000
13
Transcribed Image Text:($) Price 90 $90.00 80 70 60 50 40 30 20 10 0 $50.00 1.0 2.0 3.0 4.0 9 S 5.0 6.0 7.0 8.0 9.0 c. With the tax, what is the equilibrium quantity? Quantity (thousands per week) units (Report your answer as a whole number without rounding) Taxiposal un d. How much revenue does the government earn from the tax? $ (Round your answer to a whole number) Exise Tax (0-$20) Demand Perfectly Inste Supply Bane CALCULATIONS No Tax With Tax Supply Revely lastic Perfectly c Demand Price Pla $50,00 $50.00 0.00 Relatively Fat Perfectly Elaine Quantity Instructions: Set demand relatively inelastic such that the X Intercept of the demand curve is 6 (this corresponds to a vertical intercept of 150), supply relatively elastic such that the vertical intercept is $10, and impose a $11.00 excise tax on buyers. a. What is the equilibrium price buyers pay directly to the sellers? $[ b. After paying the tax, what is the total amount buyers pay per unit? $[ 4.000 4,000 13
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