The following graph shows the weekly market for craft beer in some hypothetical economy. Suppose the government levies a tax of $40.60 per case.The tax places a wedge between the price buyers pay and the price sellers receive.PRICE (Dolars per case)200180160140120100806040200+BuyersSellersDemandBefore TaxAfter TaxTax WedgeSupply0 100 200 300 400 500 600 700 800 900 1000QUANTITY (Cases of craft beer)Complete the following table by filling in the quantity sold, the price buyers pay, and the price sellers receive before and after the tax.QuantityPrice Buyers Pay(Cases of craft beer) (Dollars per case)Price Sellers Receive(Dollars per case)Using your answers from the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticityof demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table.Tax Burden(Dollars per case) ElasticityThe tax burden falls more heavily on the side of the market that iselastic.

Demand :Demand is when a consumer has the desire to buy something at the price that he is ready to…

Answered: The tax places a wedge between the…

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The tax places a wedge between the price buyers pay and the price sellers receive. 200 180 160 140 Demand Supply

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Price NA GOREN $20 18 16 14 10 D DAfter Tax 0 10 20 30 40 50 60 70 80 90 Quantity According to the graph, the price sellers will receive after the tax is imposed is $18.00. $14.00. $12.00. $8.00.