Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tae Quantity Price Buyers Pay Price Sellers Receive (Bottles of wine) (Dollars per bottle) (Dollars per bottle) Before Tax After Tax Using the data you entered in the previous table, calulate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity of dermand and supply over the relevant ranges using the midpoint method. Enter your results in the following table Tax Burden (Dollars per bottle) Elasticity Buyers Sellers The burden of the tax falls more heavily on the elastic side of the market.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tae.
Quantity
Price Buyers Pay
Price Sellers Receive
(Bottles of wine)
(Dollars per bottle)
(Dollars per bottle)
Before Tax
After Tax
Using the data you entered in 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
Tax Burden
(Dollars per bottle)
Elasticity
Buyers
Sellers
The burden of the tax falls more heavily on the
v elastic side of the market.
Transcribed Image Text:Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tae. Quantity Price Buyers Pay Price Sellers Receive (Bottles of wine) (Dollars per bottle) (Dollars per bottle) Before Tax After Tax Using the data you entered in 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 Tax Burden (Dollars per bottle) Elasticity Buyers Sellers The burden of the tax falls more heavily on the v elastic side of the market.
6. Effect of a tax on buyers and sellers
The following graph shoves the daily market for wine. Suppose the government institutes a tx of $40.60 per bettle. This places a veedge betveen the
price buyers pay and the price sellers receive.
200
100
Demand
Supply
140
120
100
Tax Wedge
40
20
100 150 200 250 00 0 00 40 bop
QUANTITY (Bottles of wine)
Transcribed Image Text:6. Effect of a tax on buyers and sellers The following graph shoves the daily market for wine. Suppose the government institutes a tx of $40.60 per bettle. This places a veedge betveen the price buyers pay and the price sellers receive. 200 100 Demand Supply 140 120 100 Tax Wedge 40 20 100 150 200 250 00 0 00 40 bop QUANTITY (Bottles of wine)
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