The greater the price elasticity of supply and demand, the more the market volume decreases when excise tax is imposed. Therefore, the net economic loss is large, and the one with less price elasticity among consumers and suppliers is relatively pay less tax
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The greater the price elasticity of
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- Why must local governments pay attention to the types of products they tax. Describe in detail how the elasticity of these products impacts the expected revenue to be generated by these local GovernmentsSuppose an economist estimates the price elasticity of demand for sugary drinks is -4.2, while its price elasticity of supply is 1.2. If the government decides to impose a per-unit tax of $9 per can of sugary drinks sold, how would the market price of sugary drinks be affected? Show your calculationGreen et al. (2005) estimate that the demand elasticity is -0.47 and the long-run supply elasticity is 12.0 for almonds. The corresponding elasticities are - 0.68 and 0.73 for cotton and - 0.26 and 0.64 for processing tomatoes. If the government were to apply a specific tax to each of these commodities, what incidence would fall on consumers? The incidence of a specific almond tax that would fall on consumers is percent. (Enter numeric responses using real numbers rounded to one decimal place.) eid clothing - Google Search 2 W O stv MacBook Air 80 DII DD esc F1 F2 F3 F4 F6 F7 FB F9 F10 ! @ # $ & 1 2 3 4 6 7 8 Q W E T Y U tab A S D F G H. J caps lock .... この
- Suppose supply is P= 4 + (1/4)Qs and demand is P= 58 ―(1/2)Qd. Suppose at the market equilibrium, the price elasticity of supply is 5/9 and the price elasticity of demand is 10/9. Approximately what proportion of a small per unit tax will be paid by consumers?If the price elasticity of demand for decorative pillows is 2.5 and the price elasticity of supply is 0.8, the incidence of an excise tax placed on the sale of decorative pillows would be: more on consumers than on producers. more on producers than on consumers. entirely on consumers. entirely on producers.Suppose that a lumber-producing firm had a demand for the ability to burn sawdust given by: Q = 90- P. Where Q is amount of sawdust burned when the firm has to pay price (P) per unit of sawdust burned. Calculate the quantity of sawdust burned if there is a per unit tax of $26 per unit of sawdust burned. (Do not include a $ sign in your response. Round to the nearest 2 decimal places if necessary.) Answer: Check
- If the demand for automobiles is price elastic and an excise tax is levied on sellers of automobiles that causes a 10% increase in the price of automobiles paid by buyers, then: The quantity demanded of automobiles will decrease by more than 10% and buyers will bear a proportionally larger share of the direct burden of the tax than sellers. The quantity demanded of automobiles will decrease by more than 10% and sellers will bear a proportionally larger share of the direct burden of the tax than buyers. The quantity demanded of automobiles will decrease by less than10% and total revenues from auto sales will increase. The quantity demanded of automobiles will decrease by less than 10% and total revenues from auto sales will decrease.The inverse demand for table salt is p = 200qd+1 , while the inverse supply of table salt is p = 10+ 2qs. a. Find the equilibrium price of table salt before AND after the imposition of a 40% ad valorem tax on the consumers of table salt. b. Describe the distribution of the burden (incidence) of this ad valorem tax between consumers and producers. c. Find and interpret the price elasticity of supply (es) at the after-tax equilibrium price and quantity.Suppose the demand for a product is given by P = 50 –Q. Also, the supply is given by P = 10 + 3Q. If a $12 per-unit excise tax is levied on the buyers of a good, after the tax, the total amount of tax paid by the producers is: None of these $84 $18 $63 $21
- A fixed tax on a product implies that the consumer is the one who ends up bearing the full burden of the tax. True or falseIf a $6 per unit excise (sales) tax is imposed, who will suffer the greater burden of this tax, the suppliers or demanders? a) Demanders b) Suppliers c) Both share the burden equally d) Can't tell from the available informationSuppose in the market for cigarettes, the price elasticity of supply is 2.4 and the price elasticity of demand is −0.8. If an excise tax is imposed on sellers of cigarettes, then _____. a buyers and sellers will pay equal shares of the tax b buyers will pay a greater share of the tax than sellers will c buyers will pay the whole tax d sellers will pay a greater share of the tax than buyers will e sellers will pay the whole tax
