Suppose the demand for football tickets is QD=360-10P and the market supply is QS=20P. a) Calculate the market equilibrium price and quantity. b) Suppose the government imposes a $4 excise tax per ticket on the sellers of tickets. Calculate the new market equilibrium price and quantity. c) What price would consumers pay after the tax is imposed? d) What price would firms receive after the tax is imposed? e) What share of the tax is borne by the consumers? f) What share of the tax is borne by the sellers? g) What can you say about relative elasticities of demand and supply based on your answers in part e and part f? h) Calculate tax revenue collected by the government from this tax. i) Calculate the deadweight loss of the tax. j). Explain what your answer in part i means, i.e. what does the number mean? k) Draw a neat diagram and show initial equilibrium, after-tax equilibrium, tax revenue and deadweight loss from tax.
Suppose the demand for football tickets is QD=360-10P and the market supply is QS=20P. a) Calculate the market equilibrium price and quantity. b) Suppose the government imposes a $4 excise tax per ticket on the sellers of tickets. Calculate the new market equilibrium price and quantity. c) What price would consumers pay after the tax is imposed? d) What price would firms receive after the tax is imposed? e) What share of the tax is borne by the consumers? f) What share of the tax is borne by the sellers? g) What can you say about relative elasticities of demand and supply based on your answers in part e and part f? h) Calculate tax revenue collected by the government from this tax. i) Calculate the deadweight loss of the tax. j). Explain what your answer in part i means, i.e. what does the number mean? k) Draw a neat diagram and show initial equilibrium, after-tax equilibrium, tax revenue and deadweight loss from tax.
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter4: Markets In Action
Section: Chapter Questions
Problem 14SQ
Related questions
Question
Practice Pack
Q3. Suppose the
- a) Calculate the
market equilibrium price and quantity.
- b) Suppose the government imposes a $4 excise tax per ticket on the sellers of tickets. Calculate the new market equilibrium price and quantity.
- c) What price would consumers pay after the tax is imposed?
- d) What price would firms receive after the tax is imposed?
- e) What share of the tax is borne by the consumers?
- f) What share of the tax is borne by the sellers?
- g) What can you say about relative elasticities of demand and supply based on your answers in part e and part f?
- h) Calculate tax revenue collected by the government from this tax.
- i) Calculate the
deadweight loss of the tax.
j). Explain what your answer in part i means, i.e. what does the number mean?
- k) Draw a neat diagram and show initial equilibrium, after-tax equilibrium, tax revenue and deadweight loss from tax.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Includes step-by-step video
Trending now
This is a popular solution!
Learn your way
Includes step-by-step video
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Survey of Economics (MindTap Course List)
Economics
ISBN:
9781305260948
Author:
Irvin B. Tucker
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning