Answered: One of the following would not to lead…

Business

Economics

One of the following would not to lead to a deadweight loss. Which one?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section5.A: Appendix: Price Elasticity And Tax Incidence

Problem 1AQ

See similar textbooks

Related questions

Q: Assuming the demand and supply curve are elastic, discuss the incidence of a tax imposed on the…

A: The demand curve of a good shows the quantity of the good demanded in the market by the consumers of…

Q: Graph and measure Deadweight Loss when there is a price ceiling of P = $6. Demand is P= 18-Q Supply…

A: Given Demand P =18-Q and Supply P = 3+2Q Price ceiling P= $6

Q: The more elastic the supply of a product, the more likely it is that the a. burden of a tax on the…

A: When the supply is more elastic and there is an increase in the taxes which will cause the supply…

Q: Why do taxes create a deadweight loss the same way that regulations do? If a tax and a quota raise…

A: The loss of something which is considered to be good economically that tends to occurs due to the…

Q: Government-created price floors are typically imposed to Select one: a.raise tax revenue. b.help…

A: Price floors refer to a government strategy in which it sets the price that stops the prices to fall…

Q: The supply of oil is more elastic than the demand for oil. If oil is taxed $10 per barrel, how will…

A: Elastic supply means when price increases by some percentage, quantity supply increases by more than…

Q: For Frisbees, the supply curve is the typical upward-sloping straight line, and the demand curve is…

A: Deadweight loss(DWL) is the amount of the value of the loss that is created by the market…

Q: A price ceiling is intended to benefit which group of people? consumers producers The…

A: Answer to the question is as follows:

Q: The market price will _______ when the tax is implied on the commodity

A: A tax refer to a legally set fee by the local or central government on economic entities with the…

Q: Imagine an excise tax levied on the sellers of cigarettes. Assume that the tax is $2.00 per pack.…

A: Since you have posted multiple subpart question so as per answering guideline, only first 3 subpart…

Q: and the price thai A. doesn't change; doesn't change B. doesn't change; rises by $1 a can C.…

A: 3. Compared to the old total surplus, the new total surplus will be less by the amount of the tax…

Q: If buyers are required to pay a tax on top of the price, buyers' willingness to pay will:…

A: The demand is not only the willingness to purchase a commodity by an individual, but as well as the…

Q: A tax on of $1 per kg on the buyers of sugar will cause Select one: a. the demand curve to shift…

A: A tax on sellers or buyers would lower the surplus earned by both buyers and sellers. This in turn…

Q: A shortage of a good arises when there is a binding price floor. A surplus of a good arises when…

A: Price floor refers to the minimum legal price that can be charged for a good. Price ceiling refers…

Q: This tax raises __________ in government revenue and causes a deadweight loss of __________ in this…

A: Revenue generated = size of tax ×R1 Deadweight loss = 1/2×(R-R1)×size of tax

Q: Daniel and Jacob like soda drinks. Jacob's demand for soda is: P=10-Q; the demand for Daniel is…

A: Demand and supply forces in the market interact to give the market equilibrium condition. A tax…

Q: Suppose the demand curve for gasoline is more elastic than the supply curve for gasoline. If the…

A: This can be explained by a graph below:

Q: Draw the supply curve, demand curve and solve for equilibrium (tax free) price and quantity. Solve…

Q: Consider the market for junk food. Illustrate and explain the effects on price, quantity and the…

A: The market for junk food is represented in the below steps.

Q: In a particular market, 3,000 products are sold every month. A new government policy restricts the…

A: In the market, 3000 products were sold. Now, due to government policy, the new quantity sold is…

Q: Quantity Quantity Supplied Price ($) Demanded 21 18 4 15 8 12 12 9 16 20 24 7 28 a. If the…

A: First, let’s understand the concept of price ceiling and price flooring. Price ceiling:- It is the…

Q: the demand for beer is more elastic than the demand for milk. would a tax on beer or a tax on milk…

A: Deadweight loss: deadweight loss is the loss to society that occurs with the introduction of…

Q: A government intervenes in a market and as a result the demand curve shifts to the right. Which…

A: The government makes payments to encourage the production of goods and services that it sees as…

Q: If the government places a tax of $500 on luxury cars, what happens in the market? Please assume…

A: Demand refers to the quantity that a consumer wishes to purchase at a given price in a given period…

Q: (a) Is the price elasticity of supply less than one, equal to one, or greater than one? Explain.

A: a. The price elasticity of supply is the calculation of the change of the amount being supplied with…

Q: Economics Question

A: a. The equilibrium price can be calculated by equating the given demand and supply function as…

Q: A subsidy is the opposite of a tax. With a $0.50 tax on the buyers of ice-cream cones, the…

A: Taxes and subsidies implied by the government affect the price of the goods, thus change the…

Q: Suppose the government intervenes in a competitive market and buys goods at 'p-' and sells them at…

A: The deadweight loss is the loss in the total surplus of the economy which is not being converted…

Q: Quantity Quantity Price ($) Demanded Supplied 21 1 18 4 15 8. 3 12 12 4. 9. 16 6. 20 24 7 28 a. If…

A: For binding price floor the price decided by the government should be more than the equilibrium…

Q: If equilibrium is achieved in a competitive market where there is no government and tax the…

A: Competitive market is the type of market in which there is no restriction on number of sellers and…

Q: Explain the concepts of consumers' surplus and producers' surplus. Why in a competitive market…

A: Explain the concepts of consumers' surplus and producers' surplus. Why in a competitive market…

Q: True, False or Depends. Please develop your answers 1. "Who pays the costs of a tax will depend…

A: The tax burden is distributed based on the prevailing elasticity of demand and supply. It does not…

Q: Price (dollars per pie) 5 4 2 2 4 5 6 Quantity (thousands of pies per week) The demand for apple…

A: Demand is perfectly elastic when a small change in price can cause an infinite change in quantity…

Q: Which of the following would increase quantity supplied, increase quantity demanded, and decrease…

A: If a tax is imposed on producers, then it shifts the supply curve to the left. Market price rises…

Q: Let the market demand be D (p) = 10-p and market supply be S(p) = p. a. Find the output and price…

A: Since you posted a question with multiple sub-parts, we will solve the first three sub-parts for…

Q: Richard and Henry like soda drinks. Henry's demand for soda is: P=10-Q; the demand for Richard is…

A: Without tax Henry Richard Demand for soda=P=10-Q supply for soda=P=1 Optimum profit is…

Q: Neither the supply of nor the demand for a good is perfectly elastic or perfectly inelastic.…

A: Placing a tax on a good, shifts the supply curve to the left. It leads to a decrease in demand and…

Q: When can a deadweight loss be greatest? (a) Supply is elastic, and demand is perfectly inelastic (b)…

A: A deadweight loss represents the loss of welfare to the society that mainly arises from an…

Q: Scenario...Recently there has been discussion in the news about taxing junk food (soft drinks, for…

A: If policymakers are trying to reduce the incidence of obesity by imposing a tax on junk food, then…

Q: Demand of product X = 2 P = 2000 - 4 Q Supply of product X = P = 100 + 3 Q Sales tax per unit = $…

A: "Since you have posted a question with multiple sub-parts, we will solve the first three subparts…

Q: When the government places a tax on the producer of a good or service both the supply and demand…

A: Option D is correct The supply curve for the good or service shifts to the left.

Q: Suppose the equilibrium quantity in the market for baby formula is 1,000 per month when there is no…

A: A market is a place where the buyers and sellers interact with each other and the exchange of goods…

Q: Market A Market B P(dollars) P (dollars) Q (units) Q (units) 5,000 5,000 Consider two markets…

A: ANS Tax incidence will be larger if the change in quantity demanded due to the tax is greater. PED…

Q: Price Supply P3 P1 Demand Q1 Q2 Quantity Refer to the figure above. Suppose the government imposes a…

A: When the government imposes taxes, total surplus is not maximized and it resulted in loss to the…

Q: Suppose there are two medical goods. Heart surgery and plastic (cosmetic) surgery. The market price…

A: Given: The market price for the heart surgery is = $100k The market price for plastic surgery is =…

Question

One of the following would not to lead to a deadweight loss. Which one?

Select one:

a. A tax imposed on sellers when demand is downward sloping and supply is perfectly elastic

b. A price ceiling that is set below the equilibrium price

c. A subsidy paid to sellers when both demand and supply are elastic, but not infinite

d. A tax imposed on sellers when demand is perfectly inelastic

e. All the above will result to a deadweight loss

Definition Definition Cost to society created by market inefficiency when supply and demand are not in market equilibrium.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Who would pay a tax imposed on the supplier when the price elasticity of supply is inelastic and the price elasticity of demand is elastic?
Suppose you learned that the price elasticity of demand for wheat is 0.7 between the current price for wheat and a price 2 higher per bushel. Do you think that farmers collectively would try to reduce the supply of wheat and drive the price up 2 higher per bushel? Explain your answer. Assuming that they would try to reduce supply, what problems might they have in actually doing so?
Suppose producers bear most of the burden of a specific tax of 20 cents on staplers. Which ONE statement best describes the supply and demand for staplers? Suppose sandals have an elastic own-price elasticity of demand. If price goes up by 2%, then what happens to quantity demanded?
How does a sugar tax that increases the final price of non-alcoholic beverages with sugar address the problem? Using the concept of price elasticity of demand, is a tax on non-alcoholic beverages with sugar the best way of addressing the problem?
Demand for a good is perfectly ELASTIC while supply is regularly shaped. Suppose the government taxes the good. Which of the following statements is true: A. The tax will create deadweight loss B. The tax will NOT create deadweight loss
If the elasticity of supply is greater than one, the supply curve wouldbe____ what is the correct answer? Vertical Passing through the origin Touching y-axis Horizontal
Correctly illustrate the market (supply and demand curve). Make sure to correctly shade the area of the tax. a. Washington state has an rideshare market that shares rides at a price of P. At that price, Q miles of rides will be share in one week. Elasticity of supply: relatively inelastic Elasticity of demand: relatively elastic Suppose the Washington state were to levy an excise tax collected by producers.
The price elasticity of demand for a good is 0.6. The price elasticity of supply is 1.3. If a tax is imposed on this good, who do we expect to pay a greater share of the tax? Question 14 options: Buyers Sellers Both sides equally
The government has increased VAT on some commodities in order to raise revenue. The market for commodity X was at equilibrim before tax at price Ksh. 50 per unit sold and the quantity was 5000 units. Suppose own price elasticity of demand is 0.6 and the elasticity of supply is 1.1 After the government announced tax measures the new market price increased to Ksh. 70 per unit. Calculate the equilibrium price and quantities before tax. Calculate the seller and buyers burden, Explain
Suppose an economist estimates that the price elasticity of supply for red wine is2.4 while its price elasticity of demand is -4.0.If the government decides to impost a per-unit sales tax of $40 per bottle of redwine, how would the market price for red wine be affected? Show yourcalculation.