Government decides to charge beer producers a tax

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Reference no: EM13772729

Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 15,000 cases of beer were sold every week at a price of $7 per case. After the tax, 10,000 cases of beer are sold every week; consumers pay $9 per case, and producers receive $6 per case (after paying the tax).

The amount of the tax on a case of beer is ($_______) per case. Of this amount, the burden that falls on consumers isper case, and the burden that falls on producers is ($______) per case.

True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on consumers.

Reference no: EM13772729

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