The following graph shows the weekly market for sweatpants in some hypothetical economy. Suppose the government levies a tax of $10.15 per pair. The tax places a wedge between the price buyers pay and the price sellers receive. 50 45 40 Demand Supply PRICE (Dollars per pair) 15 20 Ny 35 30 ヤーヤ 25 Tax Wedge 10 5 0 ° 100 200 300 400 500 600 700 800 900 1000 QUANTITY (Pairs of sweatpants) Complete the following table by filling in the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Quantity (Pairs of sweatpants) Price Buyers Pay (Dollars per pair) Price Sellers Receive (Dollars per pair) Before Tax After Tax Using your answers from the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity of demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table. Buyers Sellers Tax Burden (Dollars per pair) Elasticity The tax burden falls more heavily on the side of the market that is elastic.

The following graph shows the weekly market for sweatpants in some hypothetical economy. Suppose the government levies a tax of $10.15 per pair. The tax places a wedge between the price buyers pay and the price sellers receive. 50 45 40 Demand Supply PRICE (Dollars per pair) 15 20 Ny 35 30 ヤーヤ 25 Tax Wedge 10 5 0 ° 100 200 300 400 500 600 700 800 900 1000 QUANTITY (Pairs of sweatpants) Complete the following table by filling in the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Quantity (Pairs of sweatpants) Price Buyers Pay (Dollars per pair) Price Sellers Receive (Dollars per pair) Before Tax After Tax Using your answers from the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity of demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table. Buyers Sellers Tax Burden (Dollars per pair) Elasticity The tax burden falls more heavily on the side of the market that is elastic.

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter4: Supply And Demand: An Initial Look

Section: Chapter Questions

Problem 4TY: The following table summarizes information about the market for principles of economics textbooks:...

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