(Table: Market for Fried Cheesecake) The government decides to tax fried cheesecake at a rate of $0.30 per cheesecake and collect the tax from buyers. According to the table below, after paying the tax, producers will receive S per cheesecake, and they will sell cheesecakes after the tax. Table: The Market for Fried Cheesecake Price (S/unit) 3.10. 3.20 3.30 3.40 3.50 a. 3.50, 5,000 Ob. 3.30, 7,000 OC 320, 5,000 Od. 3.10; 3,000 Quantity Demanded(units) 9,000 8,000 7,000 6,000 5,000 Quantity Supplied (units) 3,000 5,000 7,000 9,000 11,000

(Table: Market for Fried Cheesecake) The government decides to tax fried cheesecake at a rate of $0.30 per cheesecake and collect the tax from buyers. According to the table below, after paying the tax, producers will receive S per cheesecake, and they will sell cheesecakes after the tax. Table: The Market for Fried Cheesecake Price (S/unit) 3.10. 3.20 3.30 3.40 3.50 a. 3.50, 5,000 Ob. 3.30, 7,000 OC 320, 5,000 Od. 3.10; 3,000 Quantity Demanded(units) 9,000 8,000 7,000 6,000 5,000 Quantity Supplied (units) 3,000 5,000 7,000 9,000 11,000

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 30CTQ: In a market where the supply curve is perfectly inelastic how does an excise tax affect the price...

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(Table: Market for Fried Cheesecake) The government decides to tax fried cheesecake at a rate of $0.30
per cheesecake and collect the tax from buyers. According to the table below, after paying the tax,
producers will receive S
per cheesecake, and they will sell
cheesecakes after the tax.
Table: The Market for Fried Cheesecake
Price(S/unit)
3.10
3.20
3.30
3.40
3.50
Oa. 3.50, 5,000.
b. 3.30, 7,000
OC 3.20, 5,000
O d. 3.10; 3,000
Quantity Demanded (units)
9,000
8,000
7,000
6,000
5,000
Quantity Supplied (units)
3,000
5,000
7,000
9,000
11,000

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Step 3: Determine the effective demand equation after tax imposed on consumer:

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Step 4: Determine the new quantity demanded schedule at given prices:

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Step 5: Determine the price received by producers and quantity sold in the market after tax:

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