Suppose the government imposes a per-unit tax on the sellers of potato chips, shifting the supply curve upwards from S1 to S2, as shown in the following figure Price (per box) 35 26 201 I 200 300 S₂ S₁ D Quantity (boxes) a. How does the per-unit tax affect the quantity transacted, the price paid by buyers and the price received by sellers? b. Calculate the government tax revenue. Do the buyers or the sellers bear a larger tax burden?
Suppose the government imposes a per-unit tax on the sellers of potato chips, shifting the supply curve upwards from S1 to S2, as shown in the following figure Price (per box) 35 26 201 I 200 300 S₂ S₁ D Quantity (boxes) a. How does the per-unit tax affect the quantity transacted, the price paid by buyers and the price received by sellers? b. Calculate the government tax revenue. Do the buyers or the sellers bear a larger tax burden?
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand And Government Policies
Section: Chapter Questions
Problem 10PA
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