Problem

Economics: Tax Revenue Economists* have found that if cigarettes are taxed at rate t, th...

Economics: Tax Revenue Economists* have found that if cigarettes are taxed at rate t, then cigarette sales will be S(t) = (64 - 51.26t)/(1+t) (billion dollars annually, before taxes).

a. Use a graphing calculator to find the tax rate t that maximizes revenue to the government.

b. Multiply this tax rate times $4 (a typical pre-tax price of a pack of cigarettes) to find the actual tax per pack.

Step-by-Step Solution

Request Professional Solution

Request Solution!

We need at least 10 more requests to produce the solution.

0 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)


All students who have requested the solution will be notified once they are available.
Add your Solution
Textbook Solutions and Answers Search