Assume that in a market where the supply and demand curves are equally elastic, initially the pre-tax equilibrium price is $20/unit. Then, suppose the government imposes a $12/unit consumer tax. What is the new (total) price that consumers pay? What is the new (total) price that producers receive? Consumers pay $26/unit and producers receives $14/unit. Consumers pay $20/unit and producers receives $14/unit. Consumers pay $32/unit and producers receives $8/unit. O Consumers pay $14/unit and producers receives $26/unit.

Assume that in a market where the supply and demand curves are equally elastic, initially the pre-tax equilibrium price is $20/unit. Then, suppose the government imposes a $12/unit consumer tax. What is the new (total) price that consumers pay? What is the new (total) price that producers receive? Consumers pay $26/unit and producers receives $14/unit. Consumers pay $20/unit and producers receives $14/unit. Consumers pay $32/unit and producers receives $8/unit. O Consumers pay $14/unit and producers receives $26/unit.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

If the burden of a tax on sugary drinks is borne mostly by consumers, it must be the case that: a) The demand for sugary drinks is much less elastic than their supply. b) Both the demand for, and the supply of, sugary drinks is inelastic. c) Both the demand for, and the supply of, sugary drinks is elastic. d) The demand for sugary drinks is much more elastic than their supply.
Questions 31-35 concern the supply and demand equations below: QD Qs = P – 3 = 27 – 2P Find the market equilibrium price and quantity. 31. P* = 32. Q* Now a $3 tax is imposed on buyers and the market adjust to its new equilibrium. 33. Рp 34. tax revenue = 35. DWL
7.8 please explain. the question 7.7 is provided in the screenshot as well
Suppose a firm has demand and supply are given by: Qd = 17−  2Px and Q s = 4Px  − 1 c. How much tax revenue does the government earn with the $12 tax when the new equilibrium quantity is 2 units after tax .
Refer to Figure A-2. The supply curve S1 and the demand curve D show the initial market equilibrium for the beer market. A $.25-per-bottle tax is on beer is placed on producers, which shifts the supply curve from S1 to S2. What is the tax revenue generated by consumers? Group of answer choices $12 15 $0.25 3
In the market for candy, researchers have estimated the following demand and supply curves. Demand: P= 8 - Q/100 Supply: P= (3Q)/700 If the government imposes an excise tax of $0.50 per unit. What is tax revenue out of this tax? (Remember that the tax does not change the demand and supply curves).
Consider the supply and demand functions graphed below. Price 100 75 70 60 10 56 Supply Demand 20 Quantity Suppose a demand-side tax is imposed. As a result of the tax, the new equilibrium quantity is 5. What is the price paid by consumers? $60 What is the price received by producers? $ How much is the tax that was imposed? How much tax revenue is collected? Which side of the market pays more of the tax? This side of the market pays more of the tax because SA A 4 4) (
Doyle and Samphantharak (2008) find that when a 5% gas tax is implemented, prices consumers pay for gas increase by about 4%. What role does demand elasticity play in determining the size of this price change? That is, under what demand elasticity cases would the price change be closer to 5%, or closer to 0%? Illustrate and explain using supply-and-demand graph(s)..
Which of the following is true? Once the equilibrium price and output is reached, all the mutually beneficial trade opportunities between suppliers and demanders will have taken place, and the sum of consumer and producer surplus is maximized. The deadweight loss of a tax is the difference between the lost consumer and producer surplus and the tax revenue generated. Those goods that are heavily taxed often have a relatively inelastic demand curve in the short run, so that the burden falls mainly on the buyer, and the deadweight loss to society is smaller than if the demand curve was more elastic. All of the above are true. Give the answer with proper explanation & Only typed Answer
Demand is given by Q° = 105 - 1.5P, where Q' is in millions of tires per year. Supply is Q5 = 1.5873P - 15.873. Suppose a tax of $20 per tire is imposed. Consumer surplus after the tax is imposed is approximately: $714. $1,234. $317. $634.
Consider an ad-valorem tax on a good X. The Demand for good X is constant elasticity with elasticity -2. The Supply for good Y is constant elasticity with elasticity 3. Consider the same setting as for the previous question. When a tax of 1% of the price is imposed on good X, then equilibrium quantity of X exchanged declines by what percentage?