Determine how a price floor is like a tax on consumer and a subsidy to suppliers and who gets the revenue.

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Answer 1

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Chapter 7, Problem 16QE

(a)

To determine

Determine how a price floor is like a tax on consumer and a subsidy to suppliers and who gets the revenue.

(b)

To determine

Determine how a price floor is like a tax on the consumer and a subsidy to suppliers and who get the revenue in the case of price floor.

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Which of the following explains why is there is a deadweight loss associated with market that is not at equilibrium? A. When a price ceiling is in effect, producers refuse to sell goods at the lower price B. When a price floor is in effect, consumers refuse to sell the good at the lower price. C. When a price ceiling is in effect, consumers refuse to buy the good at the higher price. D. When a price ceiling is in effect, producers refuse to sell the good at the higher price. E. When a price floor is in effect, producers refuse to sell the good at the higher price. F. When a price floor is in effect, producers refuse to sell the good at the lower price.

Demonstrate how a price floor is like a tax on consumers and a subsidy to suppliers. Instructions: On the following graph, use the tool 'Taxc' to show the area of the tax paid by consumers. Then use the tool 'DWL' to show the deadweight loss caused by this tax. Market with a Tax Price 12- 10- Tax 2. 8 Quantity D Tax DW

Please answer a and b and explain the answers:

Answer 2

Question

Chapter 7, Problem 16QE

(a)

To determine

Determine how a price floor is like a tax on consumer and a subsidy to suppliers and who gets the revenue.

(b)

To determine

Determine how a price floor is like a tax on the consumer and a subsidy to suppliers and who get the revenue in the case of price floor.

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Answer 3

Question

Chapter 7, Problem 16QE

(a)

To determine

Determine how a price floor is like a tax on consumer and a subsidy to suppliers and who gets the revenue.

(b)

To determine

Determine how a price floor is like a tax on the consumer and a subsidy to suppliers and who get the revenue in the case of price floor.

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Answer 4

Question

Chapter 7, Problem 16QE

(a)

To determine

Determine how a price floor is like a tax on consumer and a subsidy to suppliers and who gets the revenue.

(b)

To determine

Determine how a price floor is like a tax on the consumer and a subsidy to suppliers and who get the revenue in the case of price floor.

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Answer 5

Chapter 7, Problem 16QE

(a)

To determine

Determine how a price floor is like a tax on consumer and a subsidy to suppliers and who gets the revenue.

(b)

To determine

Determine how a price floor is like a tax on the consumer and a subsidy to suppliers and who get the revenue in the case of price floor.

Answer 6

Chapter 7, Problem 16QE

(a)

To determine

Determine how a price floor is like a tax on consumer and a subsidy to suppliers and who gets the revenue.

Answer 7

Chapter 7, Problem 16QE

(a)

To determine

Determine how a price floor is like a tax on consumer and a subsidy to suppliers and who gets the revenue.

Answer 8

(b)

To determine

Determine how a price floor is like a tax on the consumer and a subsidy to suppliers and who get the revenue in the case of price floor.

Answer 9

(b)

To determine

Determine how a price floor is like a tax on the consumer and a subsidy to suppliers and who get the revenue in the case of price floor.

Answer 10

Expert Solution & Answer

Answer 11

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Answer 12

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Answer 13

Ch. 7.1 - Prob. 1Q Ch. 7.1 - Prob. 2Q Ch. 7.1 - Prob. 3Q Ch. 7.1 - Prob. 4Q Ch. 7.1 - Prob. 5Q Ch. 7.1 - Prob. 6Q Ch. 7.1 - Prob. 7Q Ch. 7.1 - Prob. 8Q Ch. 7.1 - Prob. 9Q Ch. 7.1 - Prob. 10Q

Determine how a price floor is like a tax on consumer and a subsidy to suppliers and who gets the revenue.

Solution Summary: The author analyzes the shift in the supply curve as follows: Pf is the price floor which is above the equilibrium price ‘Pe’. The area of the tax paid by consumers is A and B.

Determine how a price floor is like a tax on consumer and a subsidy to suppliers and who gets the revenue.

Determine how a price floor is like a tax on the consumer and a subsidy to suppliers and who get the revenue in the case of price floor.

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