Enter the value of the tax in the tax on sellers field

Reference no: EM13697640

The following graph shows the daily market for wine when the tax on sellers set at $0 per bottle. Suppose the government institutes a tax of $5.80 per bottle, to be paid by the seller.

(Hint: To see the impact of the tax, enter the value of the tax in the Tax on Sellers field and move the green line to the after-tax equilibrium by adjusting the value in the Quantity field. Then enter zero in the Tax on Sellers field. You should see a tax wedge between the price buyers pay and the price sellers receive.)

Reference no: EM13697640

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