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- In the diagram to the right, illustrating a per-unit tax equal to P, minus P3, tax and the excess burden of the tax revenue is represented by the areas S2 is represented by areas P2 B D A F Quantity (millions per year) Price (dollars per unit)Given a demand curve of P = 159 - 4Qd and supply of P = 2 + 1Qs, find the total tax revenue raised by a lump sum tax of 16 dollars per unit.In this problem, p is the price per unit in dollars and q is the number of units. If the weekly demand function is p = 128 – 2q and the supply function before taxation is p = 20 + 9q, what tax per item will maximize the total tax revenue? /item
- TRUE OR FALSE. If the price elasticity of demand is 2 while the price elasticity of supply is 2, the sellers can pass on to the consumers the 50% of the tax.If a tax of $0.90 is imposed, what is the tax revenue?Suppose in the market for cigarettes, the price elasticity of supply is 2.4 and the price elasticity of demand is −0.8. If an excise tax is imposed on sellers of cigarettes, then _____. a buyers and sellers will pay equal shares of the tax b buyers will pay a greater share of the tax than sellers will c buyers will pay the whole tax d sellers will pay a greater share of the tax than buyers will e sellers will pay the whole tax
- The efficiency loss of imposing an excise tax is due to: a. Paying a higher price per unit. b. Producing and consuming fewer unithow much total tax revenue is ultimately paid by firms•The demand function for a product is represented by the equation Qd = 20 - 2P and its supply function with equations Qs = P - 4. The product is subject to a tax of 20%. a. Calculate the Pe and Qe of the after-tax balance b. Calculate the per unit tax received by the government c. Calculate the per unit tax borne by consumers and producers d. Calculate the total tax received by the government
- Question 2: Imposing a single-stage tax Assume that there are 1000 importers and manufacturers, 2,000 wholesalers, and 10,000 retailers. Each manufacturer (importer) has sales of $30,000,000 which is sold equally across wholesalers, and wholesalers put a 20% markup on the price before selling to retailers Then the goods are resold equally to 10,000 retailers and the retailers impose a 25% markup on it. Suppose the government needs to raise 4.5 billion with a single- stage sales tax, a. What would be the rate of tax the government needs to impose on the sales of importers and manufacturers to achieve the revenue target. b. What would be the rate of tax the government needs to impose on the sales of wholesalers to achieve the revenue target?Suppose the demand for a product is given by P = 50 –Q. Also, the supply is given by P = 10 + 3Q. If a $12 per-unit excise tax is levied on the buyers of a good, after the tax, the total amount of tax paid by the producers is: None of these $84 $18 $63 $21Suppose demand is represented by P = 100 - 2Q, and supply is represented by P = 5 + 3Q. If the government imposes a $5 per unit tax, to be collected from the sellers, what is the price elasticity of demand between the pre- and post-tax equilibriums? 0.5 0.63 1 ( 1.7 油