1. Hotel rooms in Smalltown go for $100, and 1,000 rooms are rented on a typical day.To raise revenue, the mayor decides to charge hotels a tax of $10 per rented room.After the tax is imposed, the going rate for hotel rooms rises to $108, and the numberof rooms rented falls to 900. Calculate the amount of revenue this tax raises forSmalltown and the deadweight loss of the tax. (Hint: Draw a graph with supply anddemand curves!)82-89-0(2916)nobisginalat 9708 910m Suro sdw uilt) dosry ads no noitsgimi to 1200 steving (Isnighsm) silt werd(Sinaga od bluore four work botnginisigsig sdt no notagim to 1200 lsiooe (lenignem) or werd db. The mayor now doubles the tax to $20. The price rises to $116, and the number ofrooms rented falls to 800. Calculate tax revenue and deadweight loss with this largertax. Are they double, more than double, or less than double? Explain.Tolagmi roma22.U odi lliw aston yosm woll12.0

Deadweight loss (DWL) is the loss of economic efficiency that occurs when the equilibrium of a…

1. Hotel rooms in Smalltown go for $100, and 1,000 rooms are rented on a typical day. a. To raise revenue, the mayor decides to charge hotels a tax of $10 per rented room. After the tax is imposed, the going rate for hotel rooms rises to $108, and the number of rooms rented falls to 900. Calculate the amount of revenue this tax raises for Smalltown and the deadweight loss of the tax. (Hint: Draw a graph with supply and demand curves!) 82-89-0 (se)nobaghal (H) qurg ads no noilsgim to oleving (Isnigisin) (Stoga od bluodle doum wor botnghi daszy odi no noitsgin to 1:00 Isisce (innigram) od wad d Isiooz or wi b. The mayor now doubles the tax to $20. The price rises to $116, and the number of rooms rented falls to 800. Calculate tax revenue and deadweight loss with this larger tax. Are they double, more than double, or less than double? Explain. folagini 2.2.U odi lliw aston yosm woll a

1. Hotel rooms in Smalltown go for $100, and 1,000 rooms are rented on a typical day. a. To raise revenue, the mayor decides to charge hotels a tax of $10 per rented room. After the tax is imposed, the going rate for hotel rooms rises to $108, and the number of rooms rented falls to 900. Calculate the amount of revenue this tax raises for Smalltown and the deadweight loss of the tax. (Hint: Draw a graph with supply and demand curves!) 82-89-0 (se)nobaghal (H) qurg ads no noilsgim to oleving (Isnigisin) (Stoga od bluodle doum wor botnghi daszy odi no noitsgin to 1:00 Isisce (innigram) od wad d Isiooz or wi b. The mayor now doubles the tax to $20. The price rises to $116, and the number of rooms rented falls to 800. Calculate tax revenue and deadweight loss with this larger tax. Are they double, more than double, or less than double? Explain. folagini 2.2.U odi lliw aston yosm woll a

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1. Hotel rooms in Smalltown go for $100, and 1,000 rooms are rented on a typical day.
To raise revenue, the mayor decides to charge hotels a tax of $10 per rented room.
After the tax is imposed, the going rate for hotel rooms rises to $108, and the number
of rooms rented falls to 900. Calculate the amount of revenue this tax raises for
Smalltown and the deadweight loss of the tax. (Hint: Draw a graph with supply and
demand curves!)
82-89-0
(2916)nobisginal
at 9708 910m Suro sdw uilt) dosry ads no noitsgimi to 1200 steving (Isnighsm) silt werd
(Sinaga od bluore four work botngini
sigsig sdt no notagim to 1200 lsiooe (lenignem) or werd d
b. The mayor now doubles the tax to $20. The price rises to $116, and the number of
rooms rented falls to 800. Calculate tax revenue and deadweight loss with this larger
tax. Are they double, more than double, or less than double? Explain.
Tolagmi roma22.U odi lliw aston yosm woll
12.0

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