This was marked as incomplete but it is not. Please answer the question. The government raises taxes on cigarettes from $1 per to $2 per pack. Prior to the tax increase, 5 million packs were sold each year. The new equilibrium quantity is 4 million packs.a. Calculate the total revenue before and after the tax increase.Before the increase, tax revenue was $million.After the increase, tax revenue was $million.Question 3b. Revenue I Select 1which tells us that theI Select 1dominated.Question 4c. Now calculate the price and quantity effect of the tax increase.The price effect (the revenue gained from the increase in T) is $million.The quantity effect (the revenue lost from the decrease in Q) is $million. (remember to use a negative sign here since it's lost revenue)(Note: does this verify your answer from (b)?]Question 5If demand is elastic, an increase in the level of a tax willI Select 1tax revenue.All other things equal,tax onI Select IV would be likely to raise the greatest revenue, because demand is mostI Select 1All other things equal, a tax on I Select 1would cause the greatest deadweight loss.

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The government raises taxes on cigarettes from $1 per to $2 per pack. Prior to the tax increase, 5 million packs were sold each year. The new equilibrium quantity is 4 million packs. a. Calculate the total revenue before and after the tax increase. Before the increase, tax revenue was $ million. After the increase, tax revenue was $ million.

The government raises taxes on cigarettes from $1 per to $2 per pack. Prior to the tax increase, 5 million packs were sold each year. The new equilibrium quantity is 4 million packs. a. Calculate the total revenue before and after the tax increase. Before the increase, tax revenue was $ million. After the increase, tax revenue was $ million.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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