Business

EconomicsQ&A LibraryTo raise revenue, the mayor decides to charge hotels a tax of $10 per rented room. After the tax is imposed, the going rate for hotel rooms rises to $108, and the number of rooms rented falls to 900. Calculate the amount of revenue this tax raises for Smalltown and the deadweight loss of the tax. (Hint: The area of a triangle is 1⁄2 * base * height.) The mayor now doubles the tax to $20. The price rises to $116, and the number of rooms rented falls to 800. Calculate tax revenue and deadweight loss with this larger tax. Do they double, more than double, or less than double? ExplainStart your trial now! First week only $4.99!*arrow_forward*

Question

**3 Hotel rooms in Smalltown go for $100, and 1,000 rooms are rented on a typical day.**

**To raise revenue, the mayor decides to charge hotels a tax of $10 per rented room. After the tax is imposed, the going rate for hotel rooms rises to $108, and the number of rooms rented falls to 900. Calculate the amount of revenue this tax raises for Smalltown and the deadweight loss of the tax. (Hint: The area of a triangle is 1****⁄****2 * base * height.)****The mayor now doubles the tax to $20. The price rises to $116, and the number of rooms rented falls to 800. Calculate tax revenue and deadweight loss with this larger tax. Do they double, more than double, or less than double? Explain**

Tagged in

Business

Economics

Find answers to questions asked by students like you.

Q: What is the formula for measuring the price elasticity of supply? Suppose the price of apples goes u...

A: Price elasticity of supply measures the degrees of responsiveness of supply as a result of the chang...

Q: The demand equation for a good is given by the equation: Q=520- 20P + 0.6Y + 2.9C (a) Find the price...

A: Plugging given values, Q = 520 - 20 x 10 + 0.6 x 700 + 2.9 x 21 Q = 520 - 200 + 420 + 60.9 Q = 800.9...

Q: Solve it correctly

A: Reserve deposit ratio is the percentage of deposits which commercial banks are required to keep as c...

Q: The table below contains information about the total utility Jerry gains from coffee and pastries he...

A: Answer: Introduction: Marginal utility: marginal utility refers to the additional utility derived fr...

Q: Compare first, second and third-degree price discrimination in terms of (1) potentialfirm profitabil...

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any ...

Q: 2. The circular-flow model The following diagram presents a circular-flow model of a simple econ...

A: Households earn income when Firms purchase Labor in factor markets.

Q: Solve the attachment

A: A monopolist competition is a market structure which combines perfect competition and monopoly as th...

Q: Below is a production possibilities table for consumer goods (automobiles) and capital goods (forkli...

A: Click to see the answer

Q: please solve the question in the image below

A: We are going to use consumer behavior theory to answer this question.