2.00 2.00 A t 2.00 # 2.00 2. Refer to the diagrams above. Suppose a sales tax of $1 is imposed on the producer. In which market would the seller pay the highest portion of the tax? a. (a). b. (b). c. (c). d. (d). e. all markets equally.

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rohithLv10

14 May 2023

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Related questions

1) If a sales tax is imposed on food, who is likely to pay most of the tax? A) mostly the buyer B) mostly the seller C) neither the seller nor the buyer D) the buyer and the seller equally E) the burden of the tax depends on the size of the tax

1) Taxing a monopoly (20 Points) Suppose that a monopolist sells a product to consumers with an aggregate demand that is downward sloping in quantity, D(Q) = 200 â 2Q. The total cost of producing Q units is C(Q) = 20Q + 2Q2 .

a) Identify the unregulated equilibrium (P â , Qâ )

b) What are the consumer and producer surpluses (CS and PS) and total welfare (W) at this equilibrium?

c) Suppose that a specific tax of Ï = 20 is imposed on each unit. i. What price-quantity pair (P 1 , Q1 ) would we expect? ii. What are CS, PS, tax revenue (T), and W? iii. What is deadweight loss?

d) Instead of a specific tax, an ad valorem tax, Î± = 16 is imposed i. What price-quantity pair (P 2 , Q2 ) would we expect? ii. What are CS, PS, T, and W? iii. What is deadweight loss?

e) Welfare distribution i. Which scenario results in the highest producer surplus? ii. Which scenario results in the greatest gains for consumers, assuming that all tax revenues are perfectly redistributed to consumers only.

scarletbadger532

13. You are given the following information about the transit system in a city: the elasticity of demand is 1.00 the current price of a ticket is $2.00 daily revenue from ticket sales for the transit system is $200,000 The manager of the transit system wants to increase revenue and is considering increasing the fare from $2.00 to $2.10. He asks you what the prospective fare increase will do to revenue. A good estimate for the percentage change in daily revenue from ticket sales in response to the price increase (rounding to the nearest integer) is: A) -10% (B)-5% (C) 0% (D) +2% (E) +4% (F) +5% (G) +8% (H) +10% (1) +20% (J) none of the above