Now calculate the government's tax revenue if it sets a tax of $0, $10, $20, $25, $30, $40, or $50 per case. (Hint: To find the equilibrium quantity after the tax, adjust the "Quantity" field until the Tax equals the value of the per-unit tax.) Using the data you generate, plot a Laffer curve by using the green points (triangle symbol) to plot total tax revenue at each of those tax levels. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. TAX REVENUE (Dollars) 800 720 640 560 480 400 320 240 160 80 0 0 + 5 True 10 15 20 25 30 TAX (Dollars per case) O False 35 40 45 50 Suppose the government is currently imposing a $15-per-case tax on champagne. Laffer Curve True or False: The government can raise its tax revenue by decreasing the per-unit tax on champagne. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per case) 50 45 40 35 30 25 20 10 5 0 0 Supply Demand 8 16 24 32 40 48 56 64 72 80 QUANTITY (Cases) Graph Input Tool Market for Champagne Quantity (Cases) Suppose the government imposes a $10-per-case tax on suppliers. At this tax amount, the equilibrium quantity of champagne is Demand Price (Dollars per case) Tax (Dollars per case) 32 30.00 10.00 Supply Price (Dollars per case) cases, and the government collects $ (s. 20.00 in tax revenue.
Now calculate the government's tax revenue if it sets a tax of $0, $10, $20, $25, $30, $40, or $50 per case. (Hint: To find the equilibrium quantity after the tax, adjust the "Quantity" field until the Tax equals the value of the per-unit tax.) Using the data you generate, plot a Laffer curve by using the green points (triangle symbol) to plot total tax revenue at each of those tax levels. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. TAX REVENUE (Dollars) 800 720 640 560 480 400 320 240 160 80 0 0 + 5 True 10 15 20 25 30 TAX (Dollars per case) O False 35 40 45 50 Suppose the government is currently imposing a $15-per-case tax on champagne. Laffer Curve True or False: The government can raise its tax revenue by decreasing the per-unit tax on champagne. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per case) 50 45 40 35 30 25 20 10 5 0 0 Supply Demand 8 16 24 32 40 48 56 64 72 80 QUANTITY (Cases) Graph Input Tool Market for Champagne Quantity (Cases) Suppose the government imposes a $10-per-case tax on suppliers. At this tax amount, the equilibrium quantity of champagne is Demand Price (Dollars per case) Tax (Dollars per case) 32 30.00 10.00 Supply Price (Dollars per case) cases, and the government collects $ (s. 20.00 in tax revenue.
Chapter6: Elasticities
Section: Chapter Questions
Problem 5P
Related questions
Question
Please solve them.
Transcribed Image Text:Now calculate the government's tax revenue if it sets a tax of $0, $10, $20, $25, $30, $40, or $50 per case. (Hint: To find the equilibrium quantity
after the tax, adjust the "Quantity" field until the Tax equals the value of the per-unit tax.) Using the data you generate, plot a Laffer curve by using
the green points (triangle symbol) to plot total tax revenue at each of those tax levels.
Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.
TAX REVENUE (Dollars)
800
720
640
560
480
400
320
240
160
80
0
0
+
5
True
10
15 20 25 30
TAX (Dollars per case)
O False
35
40
45 50
Suppose the government is currently imposing a $15-per-case tax on champagne.
Laffer Curve
True or False: The government can raise its tax revenue by decreasing the per-unit tax on champagne.
Transcribed Image Text:Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
PRICE (Dollars per case)
50
45
40
35
30
25
20
10
5
0
0
Supply
Demand
8 16 24 32 40 48 56 64 72 80
QUANTITY (Cases)
Graph Input Tool
Market for Champagne
Quantity
(Cases)
Suppose the government imposes a $10-per-case tax on suppliers.
At this tax amount, the equilibrium quantity of champagne is
Demand Price
(Dollars per case)
Tax
(Dollars per case)
32
30.00
10.00
Supply Price
(Dollars per case)
cases, and the government collects $
(s.
20.00
in tax revenue.
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