Price 20 18 16 14 12 10 $1.200 Х $2.000 1000 Quantity Assume that the market in the graph above is at an initial equilibrium price of $10 and an equilibrium quantity of 500 units. If the government decides to add a $4 per-unit tax on this good, it will be able to collect the following amount of tax revenue: 300 400 500 $1,600 S1 SO Demand

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter5: Elasticity
Section: Chapter Questions
Problem 30CTQ: In a market where the supply curve is perfectly inelastic how does an excise tax affect the price...
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Price
20
18
16
14
12
10
х
$1.200
0
300 400 500
$2.000
S1
SO
Quantity
Assume that the market in the graph above is at an initial equilibrium price of $10 and an equilibrium
quantity of 500 units. If the government decides to add a $4 per-unit tax on this good, it will be able
to collect the following amount of tax revenue:
Demand
1000
Transcribed Image Text:Price 20 18 16 14 12 10 х $1.200 0 300 400 500 $2.000 S1 SO Quantity Assume that the market in the graph above is at an initial equilibrium price of $10 and an equilibrium quantity of 500 units. If the government decides to add a $4 per-unit tax on this good, it will be able to collect the following amount of tax revenue: Demand 1000
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