(d) Suppose the government wishes to help out consumers impacted by this tax by subsidizing coffee purchased by consumers at $0.75 per pound (i.e. a negative tax on consumers). To fund this, they raise the tax on sellers to $1.50 per pound sold. Discuss the impact of this policy on the price and quantity of coffee and the resulting net tax burdens.

ECON MICRO
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ISBN:9781337000536
Author:William A. McEachern
Publisher:William A. McEachern
Chapter3: Economic Decision Makers
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answer just question d

 

(d) Suppose the government wishes to help out consumers impacted by
this tax by subsidizing coffee purchased by consumers at $0.75 per
pound (i.e. a negative tax on consumers). To fund this, they raise
the tax on sellers to $1.50 per pound sold. Discuss the impact of this
policy on the price and quantity of coffee and the resulting net tax
burdens.
Transcribed Image Text:(d) Suppose the government wishes to help out consumers impacted by this tax by subsidizing coffee purchased by consumers at $0.75 per pound (i.e. a negative tax on consumers). To fund this, they raise the tax on sellers to $1.50 per pound sold. Discuss the impact of this policy on the price and quantity of coffee and the resulting net tax burdens.
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