Chapter 17, Problem 4TY

Consider the following market supply and demand information for cigarettes:   Price ($)                                                         Demand for Cigarettes (in million packs per week) $2                                                                                            12   3                                                                                            10   4                                                                                              8   5                                                                                              6   6                                                                                              4   7                                                                                              2 and the supply is 8,000,000 cigarette packs per week. Now suppose that the government mandates a $1 excise tax per pack on the buyers of cigarettes. Who bears the economic incidence (tax burden) of the excise tax?…

Given the following information: QD = 240 – 5P QS = P Where QD is the quantity demanded, Qs is the quantity supplied and P is the price Suppose that the government decides to impose a tax of $12 per unit on sellers in this market. Determine demand and supply equation after tax Given the following information: QD = 240 – 5P QS = P Where QD is the quantity demanded, Qs is the quantity supplied and P is the price Suppose that the government decides to impose a tax of $12 per unit on sellers in this market. Determine demand the buyer’s price after tax

Consider a market with the following demand and supply curves:                                                  Q (p) = 20 – 2P                                                                 Q (p) = - 10 + 3P (b)Suppose the government imposed a sales tax of $0.80 per unit of output sold, find the price paid by the consumer, the price received by the supplier, the equilibrium quantity transacted, and the total tax revenue received by the government.   (c)What do you think is the purpose for such tax policy? In your explanation, include a brief discussion of the importance of price elasticity of demand in the choice of commodities to be taxed in order to achieve specific policy goal(s).