Suppose the government applies a specific tax to a good where the demand elasticity, e, is -0.5, and the supply elasticity, 1. is 0.6. If a specific tax, T, of $3.50 per unit were placed on the good, what is the price increase that consumers would pay? The price paid by consumers would increase by $ per unit. (Enter your response rounded to the nearest penny.) The amount producers receive would decrease by $ per unit. (Enter your response rounded to the nearest penny) The tax incidence on consumers is

Suppose the government applies a specific tax to a good where the demand elasticity, e, is -0.5, and the supply elasticity, 1. is 0.6. If a specific tax, T, of $3.50 per unit were placed on the good, what is the price increase that consumers would pay? The price paid by consumers would increase by $ per unit. (Enter your response rounded to the nearest penny.) The amount producers receive would decrease by $ per unit. (Enter your response rounded to the nearest penny) The tax incidence on consumers is

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 2AQ

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