Homework Answers
CS pre tax = (1/2)*(30 - 18)*60 = 360
PS pre tax = (1/2)*18*60 = 540
CS post tax = (1/2)*(30 - 20)*50 = 250
PS post tax =(1/2)*(15 - 0)*50 = 375
Tax revenue = 5*50 = 250
DWL = (1/2)*(20 - 15)*(60 - 50 ) = 25
Incidence :
% on consumers = 20 - 18 = 2
so, 2/5 = 0.4 = 40%
% on producers = 3/5 =0.6 = 60%
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