What is the efficiency loss ratio of the tax

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Reference no: EM132178314

Question - Suppose that a $2 per arrow is levied on the sale of arrows.

a. Is this a unit tax or ad valorem tax?

b. What will the equilibrium price and quantity be in the presence of the tax?

c. How is the incidence of the tax split between buyers and sellers?

d. How much revenue will the tax collect each year?

e. What is the excess burden (DWL) of the tax?

f. What is the efficiency loss ratio of the tax?

Reference no: EM132178314

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