The amount of the tax on a case of beer is per case of

Reference no: EM13644426

Suppose that the U.S. government decides to charge beer consumers a tax. Before the tax, 25,000 cases of beer were sold every week at a price of $5 per case. After the tax, 19,000 cases of beer are sold every week; consumers pay $6 per case (including the tax), and producers receive $2 per case.

The amount of the tax on a case of beer is _____ per case. Of this amount, the burden that falls on consumers is ____ per 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 larger if the tax had been levied on producers.

Reference no: EM13644426

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