Consider the market for gasoline illustrated in the figure to the right. Suppose the market is perfectly competitive and initially in equilibrium. Now suppose the government imposes a gasoline tax of $1.50 to be paid for by producers. The effect of this tax is illustrated in the figure to the right. Who bears the burden of the tax? Consumers pay $ of the $1.50 tax (enter a numeric response using a real number rounded to two decimal places) and producers pay $ ☐ of th Question Viewer 7.00- 6.50- 6.00- 5.50- 5.00- 4.50- 4.00- 3.50- 3.00- 2.50- 2.00- Price of gasoline (dollars per gallon) 1.50- 1.00- 0.50- 0.00 -0 10 -20 D -80 30 40 50 60 70 80 Quantity of gasoline 90
Consider the market for gasoline illustrated in the figure to the right. Suppose the market is perfectly competitive and initially in equilibrium. Now suppose the government imposes a gasoline tax of $1.50 to be paid for by producers. The effect of this tax is illustrated in the figure to the right. Who bears the burden of the tax? Consumers pay $ of the $1.50 tax (enter a numeric response using a real number rounded to two decimal places) and producers pay $ ☐ of th Question Viewer 7.00- 6.50- 6.00- 5.50- 5.00- 4.50- 4.00- 3.50- 3.00- 2.50- 2.00- Price of gasoline (dollars per gallon) 1.50- 1.00- 0.50- 0.00 -0 10 -20 D -80 30 40 50 60 70 80 Quantity of gasoline 90
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 20RQ: Under which circumstances does line tax burden fall entirely on consumers?
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![Consider the market for gasoline illustrated in the figure to
the right. Suppose the market is perfectly competitive and
initially in equilibrium.
Now suppose the government imposes a gasoline tax of
$1.50 to be paid for by producers. The effect of this tax is
illustrated in the figure to the right.
Who bears the burden of the tax?
Consumers pay $
of the $1.50 tax (enter a numeric
response using a real number rounded to two
decimal places) and producers pay $ ☐ of th Question Viewer
7.00-
6.50-
6.00-
5.50-
5.00-
4.50-
4.00-
3.50-
3.00-
2.50-
2.00-
Price of gasoline (dollars per gallon)
1.50-
1.00-
0.50-
0.00
-0
10
-20
D
-80
30 40 50 60 70 80
Quantity of gasoline
90](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6bd4e6d0-caf2-4ae0-92d5-b31094e51ebd%2F6d6d72d4-9cd3-4165-8bea-e674f0c5bf92%2Fepd4p2m_processed.png&w=3840&q=75)
Transcribed Image Text:Consider the market for gasoline illustrated in the figure to
the right. Suppose the market is perfectly competitive and
initially in equilibrium.
Now suppose the government imposes a gasoline tax of
$1.50 to be paid for by producers. The effect of this tax is
illustrated in the figure to the right.
Who bears the burden of the tax?
Consumers pay $
of the $1.50 tax (enter a numeric
response using a real number rounded to two
decimal places) and producers pay $ ☐ of th Question Viewer
7.00-
6.50-
6.00-
5.50-
5.00-
4.50-
4.00-
3.50-
3.00-
2.50-
2.00-
Price of gasoline (dollars per gallon)
1.50-
1.00-
0.50-
0.00
-0
10
-20
D
-80
30 40 50 60 70 80
Quantity of gasoline
90
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