20-2=Q+2Q p=20-2x6-20-12-8 so, the equilibrium price is $8 18-30 In an effort to decrease cigarette sales, the Chapel Hill city council has decided to impose a $4 tax on the buyers of cigarettes. b. What is the tax wedge? С Sketch a graph showing the effect of the tax. Clearly label MPC, MSC, MPB, MSB, CS, PS, the tax revenue (TR), and DWL. d. Calculate PUYER, PSELLER, and QTAX. Pbuyer=$32/$3-$10.67 Pseller=$20/$3-$6.67 Qtax = $14/$3-4.67 MBP 8 f. Is the tax outcome efficient? Why or why not? I e. Calculate consumer surplus, producer surplus, deadweight loss, and the total tax revenue & List a supply shifter that also would have decreased the amount of cigarettes bought and sold.

20-2=Q+2Q p=20-2x6-20-12-8 so, the equilibrium price is $8 18-30 In an effort to decrease cigarette sales, the Chapel Hill city council has decided to impose a $4 tax on the buyers of cigarettes. b. What is the tax wedge? С Sketch a graph showing the effect of the tax. Clearly label MPC, MSC, MPB, MSB, CS, PS, the tax revenue (TR), and DWL. d. Calculate PUYER, PSELLER, and QTAX. Pbuyer=$32/$3-$10.67 Pseller=$20/$3-$6.67 Qtax = $14/$3-4.67 MBP 8 f. Is the tax outcome efficient? Why or why not? I e. Calculate consumer surplus, producer surplus, deadweight loss, and the total tax revenue & List a supply shifter that also would have decreased the amount of cigarettes bought and sold.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 8PA

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