Figure: The Shrimp Price of shrimp (per pound) $22.50 20.00 17.50 15.00 12.50 10.00 7.50 5.00 2.50 750 1,000 1,250 1,500 1,750 Quantity of shrimp (in pounds) 250 500 (Figure: The Shrimp Market). Look at the figure The Shrimp Market. If the government wants to excise tax on sellers, and the total tax limit shrimp sales to 500 pounds, it can impose a revenue generated will be _____- O $7.50; $7,500 O $10; $2,500 O The answer cannot be determined from the information provided. O $5; $2,500

Figure: The Shrimp Price of shrimp (per pound) $22.50 20.00 17.50 15.00 12.50 10.00 7.50 5.00 2.50 750 1,000 1,250 1,500 1,750 Quantity of shrimp (in pounds) 250 500 (Figure: The Shrimp Market). Look at the figure The Shrimp Market. If the government wants to excise tax on sellers, and the total tax limit shrimp sales to 500 pounds, it can impose a revenue generated will be _____- O $7.50; $7,500 O $10; $2,500 O The answer cannot be determined from the information provided. O $5; $2,500

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 30CTQ: In a market where the supply curve is perfectly inelastic how does an excise tax affect the price...

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In a market where the supply curve is perfectly inelastic how does an excise tax affect the price paid by consumers and the quantity bought and sold?
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Price (dollars per hour) 7.00 6.60 6.00 5.60 5.00 0 1 2 3 4 5 6 7 8 Quantity (thousands of frisbees) Figure 6.3.1 OB) $5.60. S + tax Refer to Figure 6.3.1 showing the market for frisbees before and after a tax is imposed. On each frisbee, the sellers' burden of the tax is OA) $0.60. OC) $0.40. S OD) $6.60.
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Why does the government ass excise taxes to certain products?
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