Before tax:
Quantity traded = 40 million of beer
Price = $7
Tax imposed on consumers:
Quantity traded= 34 million of beer
Price consumer pay = $8 (Tax paid by consumers = $8 - $7 = $1)
Price Producers Receive = $4 (Tax Paid by Producers = $7 - $4 = $3)
Tax = Price Consumer Pay - Price Producers Receive (Money collected by government in the form of tax)
Tax = $8 - $4 = $4
The amount of the tax on a case of beer is $4. Of this amount, the burden that falls on consumers is $1 and burden that falls on producers is $3.
True, the effect of tax on quantity sold would have been the same if the tax had been levied on producers because burden of tax is dependent on the elasticity of consumer demand and producer surpply. If producer supply is more inelastic than consumer demandm, more tax would fall on producer and vice versa. Thus, burden of tax would be same, no matter on whom it is imposed, it will be divided as per their elasticity.
Please help! 5. Calculating tax incidence Suppose that the U.S. government decides to charge beer consumers...
5. Calculating tax incidence Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 25 billion cases of beer were sold every year at a price of $7 per case. After the tax, 19 billion cases of beer are sold every year; consumers pay $8 per case, and producers receive $4 per case (after paying the tax) The amount of the tax on a case of beer is$ per case. Of this amount, the burden...
5. Calculating tax incidence Suppose that the U.5. government decides to charge beer consumers a tax. Before the tax. 50 billion cases of beer were sold every year at a price of $7 per case. After the tax, 44 billion cases of beer are sold every year consumers pay $10 per case (including the tax), and producers receive 4 per The amount of the tax on a case of beer is 5 that falls on producers is 5 per case....
6. Calculating tax incidence Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 15 million cases of cola were sold every month at a price of $6 per case. After the tax, 9 million cases of cola are sold every month; consumers pay $9 per case (including the tax), and producers receive $3 per case The amount of the tax on a case of colas S p er case of this amount, the burden...
Suppose that the U.S. government decides to charge beer consumers a tax. Before the tax, 30,000 cases of beer were sold every week at a price of 7 per case. After the tax, 24,000 cases of beer are sold every week; consumers pay $8 per case (including the tax), and case. The amount of the tax on a case of beer is _______ per case. Of this amount, the burden that falls on consumers is _______ per case, and the burden...
Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 10 million cases of beer were sold every month at a price of $4 per case. After the tax, 3 million cases of beer are sold every month; consumers pay $7 per case, and producers receive $2 per case (after paying the tax). The amount of the tax on a case of beer is $_____per case. Of this amount, the burden that falls on consumers...
5. Calculating tax incidence Suppose that the U.S. government decides to charge cola producers a tax. Before the tax, 30 billion cases of cola were sold every year at a price of $5 per case. After the tax, 24 billion cases of cola are sold every year; consumers pay $6 per case, and producers receive $2 per case (after paying the tax). The amount of the tax on a case of cola is _____per case. Of this amount, the burden...
5. Calculating tax incidence Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 10 billion cases of beer were sold every year at a price of $6 per case. After the tax, 5 billion cases of beer are sold every year; consumers pay $8 per case, and producers receive $5 per case (after paying the tax). The amount of the tax on a case of beer is _______ per case. Of this amount, the burden that...
. Calculating tax incidence Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 50 million bottles of wine were sold every month at a price of $6 per bottle. After the tax, 44 million bottles of wine are sold every month; consumers pay $7 per bottle, and producers receive $3 per bottle (after paying the tax). The amount of the tax on a bottle of wine is s per bottle. Of this amount, the...
5. Calculating tax incidence Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 25 billion bottles of wine were sold every year at a price of $7 per bottle. After the tax, 18 billion bottles of wine are sold every year; consumers pay $8 per bottle, and producers receive $5 per bottle (after paying the tax). The amount of the tax on a bottle of wine is $3 per bottle. Of this amount, the...
. Calculating tax incidence suppose that the u·s·government decides to charge oola consumers a tax. Before the tax, 50,000 cases ofcos were sold every week at a price of $7 per case. After the tax, 44,000 cases of cola are sold every week; consumers pay $10 per case (inluding the tax), and producers receive $4 per case. of this amount, the burden thast tails on consumers is per case, and the The amount of the tax on a case of...