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- 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).Daily demand for gasoline at a Gas Station is described by Q = 980 - 300p, where Q are gallons of gasoline sold and p is the price in dollars. Gas Station's supply is Q = -2,980 + 3,000p. Suppose the state government places a tax of 18 cents on every gallon of gasoline sold. (a) What are the before-tax and after-tax equilibrium quantities of gasoline Q? (b) What are the changes in consumer's and producer's surplus due to tax? (c) What is the deadweight loss resulting from this tax?The following equations represent the annual quantity demanded (Qd) and quantity supplied (Qs) for tickets for Danubiana Museum of Modern Art in Bratislava, Slovakia. Qd = 50,000-1,000P Qs = 10,000+3,000P, where P is the price of a ticket in euros. a) Suppose that there is a price floor of 7 euros per museum ticket in Slovakia. Will there be a surplus or a shortage in the market for tickets for Danubiana Museum of Modern Art? If yes, how large will it be? b) Suppose that there is a price ceiling of 7 euros per museum ticket in Slovakia. Will there be a surplus or a shortage in the market for tickets for Danubiana Museum of Modern Art? If yes, how large will it be? c) Suppose that there is a price ceiling of 20 euros per museum ticket in Slovakia. Will there be a surplus or a shortage in the market for tickets for Danubiana Museum of Modern Art? If yes,…
- The government of a State has been experiencing an increase in number of obesity cases. Research suggests an increase in consumption of a particular fast food item is responsible for high number of obesity cases. As a result, the government of that State is considering an imposition of $1 tax. Monthly demand and supply for this good are QD=21-1P and QS= -1+1P respectively. Draw the demand and Supply curve for fast food before the tax is imposed. Calculate the equilibrium price and quantity, consumer and producer surplus, and label them on the graph. Calculate the price elasticity of demand and supply for fast food. If the State government imposes a tax, who will bear the most of the burden of the tax? Suppose that the State government finally imposes a $1 tax on fast food. What will the new equilibrium price and quantity? Include the tax on your graph. Calculate the consumer and producer surplus and label them on the graph. Is there any deadweight loss resulting from the tax on that…12) In the effort to reduce alcohol consumption, the government is considering a $1 tax on each gallon of liquor sold. The legal incidence of the tax will be on producers. Suppose the demand for alcohol is described by Q D = 500,000 – 20,000*P where Q D is quantity and P is price per gallon (NOTE: the inverse demand curve would be P = 25 – 0.00005*Q D ). The supply curve is described at Q S = 30,000*P (NOTE: This would make the MC curve MC = (1/30,000)*Q S ). D. Calculate the elasticity of demand at the original equilibrium price. Calculate the elasticity of supply at the original equilibrium price. e. Calculate the deadweight loss of the tax. f. Suppose that if you were to disaggregate the market demand into young drinkers and old drinkers you would find that the demand for alcohol is more elastic among young drinkers than old drinkers. Which group of drinkers will change their behavior more? Which group of drinkers will bear the bigger burden of the proportion of the tax that…An annual city permit fee causes the supply curve for hot dogs from food carts to shift from S1 to S2. The fee is based on number of units sold and therefore works like a per-item tax on sellers. Use the area tool to draw the area representing the deadweight loss that is due to the tax. To refer to the graphing tutorial for this question type, please click here. Price ($) 8. S2 S1 7.5 7 6.5 5.5 5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 4 VIEW SOLUTION * SUBMIT ANSWER 7 OF 14 QUESTIONS COMPLETED MacBook Pro
- The graphs show the market for bags of potato chips, which is currently at an equilibrium price of $1.33 per bag and an equilibrium quantity of 5.33 million bags. Suppose that, in an attempt to lower blood pressure and reduce healthcare costs, the government imposes a $1.00 excise (or commodity) tax on potato chips. Suppose the government levies this tax on manufacturers for each bag of potato chips they produce. Please shift the appropriate curve or curves to illustrate this. Price ($ per bag) 5.0 4.5 4.0 3.5 3.0 2.0 What is the price paid per bag by consumers (Pc) with this new tax? What is the price received net of tax (Pp) per bag by producers with this new tax? 2.5 Supply 1.5 10 1.0 0.5 0.0 0 1 2 3 4 Pc = Pp = = GA $ EA $ 5 Demand 6 7 8 9 10 Quantity (millions of bags)9. Relationship between tax revenues, deadweight loss, and demandelasticity The government is considering levying a tax of $60 per unit on suppliers of either smart watches or yoga mats. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for smart watches is shown by Dw (on the first graph), and the demand for yoga mats is shown by Dy (on the second graph). Suppose the government taxes smart watches. The following graph shows the annual supply and demand for this good. It also shows the supply curve (S + Tax) shifted up by the amount of the proposed tax ($60 per watch). On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for smart watches. Then use the black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax. PRICE (Dollars per watch) 120 110 100 90 80 70 60 50 40 30 20 10 0 Smart Watches Market S+Tax Supply…Suppose that the demand for rental apartments in Washington, DC, is represented by the following equation, where P is the monthly rent. QD = 10,000 – 2PThe supply of rental apartments is represented by the following equation: QS = 2,000 + 3PThe equilibrium rent is a) $ , and the equilibrium quantity is b) $ . Part 2 (1 point) Suppose the city council passes an ordinance placing a price ceiling of $1,200 on apartment rentals. How much of a shortage will this lead to? apartments
- Refer to the figure entitled "Market for Cola". Suppose DO denotes the original demand curve and D1 denotes the demand curve after a per-unit tax is imposed on the buyers. What is the change in equilibrium price due to the tax? Price (per six pack) 10 1 4 10 Market for Cola D₂ 20 30 40 Quantity (# of six packs) Da 50 1) $1 2) $2 3) $3 4) $4 5) None of the above.Suppose a local government votes to impose an excise tax of $0.90 per bottle on the sales of bottled water. (Assume that all bottles are identical and residents cannot shop elsewhere.) Before the tax the equilibrium price and quantity are $1.20 and 2100 bottles per day. After the tax is imposed, market equilibrium adjusts to a price of $2.00 and quantity of 1400 bottles per day. How much revenue from the tax does the local government collect each day?Consider the following demand function for airline tickets (quantities are in thousands): Q = 10-0.1p, + 0.4py + 0.25p, + 0.005Y, where P, = price of an airline ticket Py = price of a bus ticket Q = quantity demanded P, = price of gasoline Y = consumer income %3D According to the above equation, airline tickets and bus tickets are V goods. If, in equilibrium, the cross-price elasticity between airline tickets and gasoline is 1.1; when the price of the gasoline increases by 4%, the quantity demanded of airline tickets increases by % (enter your response rounded to two decimal places). Reaction O stv MacBook Air 80 DII DD F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 F11 ! @ #3 $ 一 2 3 4. 6 7 Q W E Y U { A F G J K L Z C V B- M く > Fion command command option * 00 エ R