ng.cengage.com CENGAGE MINDTAP Chapter 08 Problems & Applications Suppose that a tax of T is placed on buyers, so the new demand equation is as follows: QD = 240 - (P+T) The new equilibrium price is now P = 80 and the new equilibrium quantity is Q = 160 - 2. Tax revenue is Tx Q. Use the green points (triangle symbol) to graph tax revenue for the following tax (T) values: 0, 30, 90, 120, 150, 210, and 240. Tax Revenue (Thousands of dollars) 22 12 10 88 6 2 0 0 50 30 60 90 120 150 180 210 240 270 300 T Laffer Curve The following graph shows the old and new equilibrium Information and now the deadweight loss of a tax is the area of the triangle between the 88 a DII DD
ng.cengage.com CENGAGE MINDTAP Chapter 08 Problems & Applications Suppose that a tax of T is placed on buyers, so the new demand equation is as follows: QD = 240 - (P+T) The new equilibrium price is now P = 80 and the new equilibrium quantity is Q = 160 - 2. Tax revenue is Tx Q. Use the green points (triangle symbol) to graph tax revenue for the following tax (T) values: 0, 30, 90, 120, 150, 210, and 240. Tax Revenue (Thousands of dollars) 22 12 10 88 6 2 0 0 50 30 60 90 120 150 180 210 240 270 300 T Laffer Curve The following graph shows the old and new equilibrium Information and now the deadweight loss of a tax is the area of the triangle between the 88 a DII DD
Principles of Economics 2e
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Author:Steven A. Greenlaw; David Shapiro
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Chapter5: Elasticity
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Problem 30CTQ: In a market where the supply curve is perfectly inelastic how does an excise tax affect the price...
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CENGAGE MINDTAP
Chapter 08 Problems & Applications
Suppose that a tax of T is placed on buyers, so the new demand equation is as follows:
QD
=
240 - (P+T)
The new equilibrium price is now P = 80
and the new equilibrium quantity is Q = 160 - 2.
Tax revenue is Tx Q.
Use the green points (triangle symbol) to graph tax revenue for the following tax (T) values: 0, 30, 90, 120, 150, 210, and 240.
Tax Revenue (Thousands of dollars)
22
12
10
88
6
2
0
0
50
30
60
90
120
150
180
210
240
270
300
T
Laffer Curve
The following graph shows the old and new equilibrium Information and now the deadweight loss of a tax is the area of the triangle between the
88
a
DII
DD
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