Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 30 billion bottles of wine were sold every year at a price of 57 per bottle. After the tax, 25 billion bottles of wine are sold every year; consumers pay $9 per bottle, and producers receive $6 per bottle (after paying the tax). The amount of the tax on a bottle of wine is S per bottle. Of this amount, the burden that falls on consumers is s per bottle, and the purden that falls on producers is s per bottle.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 30 billion bottles of wine were sold every year at a price of
$7 per bottle. After the tax, 25 billion bottles of wine are sold every year; consumers pay $9 per bottle, and producers receive $6 per bottle (after
paying the tax).
The amount of the tax on a bottle of wine is s
per bottle. Of this amount, the burden that falls on consumers iss
per bottle, and the
burden that falls on producers is s
per bottle.
Transcribed Image Text:Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 30 billion bottles of wine were sold every year at a price of $7 per bottle. After the tax, 25 billion bottles of wine are sold every year; consumers pay $9 per bottle, and producers receive $6 per bottle (after paying the tax). The amount of the tax on a bottle of wine is s per bottle. Of this amount, the burden that falls on consumers iss per bottle, and the burden that falls on producers is s per bottle.
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