Suppose the equilibrium for the market of staplers has a price of $49 , at which 136 staplers are sold. The Government believes staplers are undervalued and imposes a price floor of $57 under which only 72 staplers are transacted, generating a deadweight loss of $382. What size tax would mimic the effect that the price floor has on consumers? Answer:
Suppose the equilibrium for the market of staplers has a price of $49 , at which 136 staplers are sold. The Government believes staplers are undervalued and imposes a price floor of $57 under which only 72 staplers are transacted, generating a deadweight loss of $382. What size tax would mimic the effect that the price floor has on consumers? Answer:
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter5: Elasticity Of Demand And Supply
Section5.A: Appendix: Price Elasticity And Tax Incidence
Problem 1AQ
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Transcribed Image Text:Suppose the equilibrium for the market of staplers has a price of $49, at which 136 staplers are sold. The Government believes staplers are undervalued and imposes a price floor of
$57 under which only 72 staplers are transacted, generating a deadweight loss of $382. What size tax would mimic the effect that the price floor has on consumers?
Answer:
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