P ($) 2.10 1.65 1.25 0.80 0.50 40 60 100 Q Note: Graph not drawn to scale. The government will introduce a $0.85 tax per pencil. Answer the following questions Prior to the introduction of the tax, what is the equilibrium price and equilibrium quantity in this a. market? b. After the $0.85 tax per pencil is imposed, what is the new price paid by buyers and the price received by sellers? What is the quantity of pencils that will be sold? C. Calculate the tax revenue d. Explain who bears the largest burden of the tax (larqest tax incidence).
P ($) 2.10 1.65 1.25 0.80 0.50 40 60 100 Q Note: Graph not drawn to scale. The government will introduce a $0.85 tax per pencil. Answer the following questions Prior to the introduction of the tax, what is the equilibrium price and equilibrium quantity in this a. market? b. After the $0.85 tax per pencil is imposed, what is the new price paid by buyers and the price received by sellers? What is the quantity of pencils that will be sold? C. Calculate the tax revenue d. Explain who bears the largest burden of the tax (larqest tax incidence).
Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand, And Government Policies
Section: Chapter Questions
Problem 4PA
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The graph below shows the market supply and market
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