Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 25 billion bottles of wine were sold every year at a price of $5 per bottle. After the tax, 18 billion bottles of wine are sold every year; consumers pay $6 per bottle, and producers receive $3 per bottle (after paying the tax). The amount of the tax on a bottle of wine is $ per bottle. Of this amount, the burden that falls on consumers is $ per bottle, and the burden that falls on producers is $ per bottle.
Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 25 billion bottles of wine were sold every year at a price of $5 per bottle. After the tax, 18 billion bottles of wine are sold every year; consumers pay $6 per bottle, and producers receive $3 per bottle (after paying the tax). The amount of the tax on a bottle of wine is $ per bottle. Of this amount, the burden that falls on consumers is $ per bottle, and the burden that falls on producers is $ per bottle.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand And Government Policies
Section6.2: Taxes
Problem 2QQ
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