Complete the following table by filling in the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Quantity Price Buyers Pay Price Sellers Receive (Cases of craft beer) (Dollars per case) (Dollars per case) Before Tax After Tax Using your answers from the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity of demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Complete the following table by filling in the quantity sold, the price buyers pay, and the price sellers receive before and after the tax.
Price Buyers Pay Price Sellers Receive
(Dollars per case) (Dollars per case)
Before Tax
After Tax
Quantity
(Cases of craft beer)
Using your answers from the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity
of demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table.
Buyers
Sellers
Tax Burden
(Dollars per case)
Elasticity
The tax burden falls more heavily on the side of the market that is
elastic.
Transcribed Image Text:Complete the following table by filling in the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Price Buyers Pay Price Sellers Receive (Dollars per case) (Dollars per case) Before Tax After Tax Quantity (Cases of craft beer) Using your answers from the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity of demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table. Buyers Sellers Tax Burden (Dollars per case) Elasticity The tax burden falls more heavily on the side of the market that is elastic.
The following graph shows the weekly market for craft beer in some hypothetical economy. Suppose the government levies a tax of $40.60 per case.
The tax places a wedge between the price buyers pay and the price sellers receive.
Demand
Supply
140
120
K
100
Tax Wedge
80
PRICE (Dollars per case)
200
180
160
60
40
20
0
0
400 500 600 700 800
QUANTITY (Cases of craft beer)
100 200 300
900 1000
Transcribed Image Text:The following graph shows the weekly market for craft beer in some hypothetical economy. Suppose the government levies a tax of $40.60 per case. The tax places a wedge between the price buyers pay and the price sellers receive. Demand Supply 140 120 K 100 Tax Wedge 80 PRICE (Dollars per case) 200 180 160 60 40 20 0 0 400 500 600 700 800 QUANTITY (Cases of craft beer) 100 200 300 900 1000
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