What portion of the tax would be borne by buyers

Assignment Help Econometrics

Reference no: EM13198580

A city which does not tax alchohol is considering the introduction of a $0.40 per 6 pack tax. The economic advisors to the city estimate the supply and demand curves for cigarettes as:
QD = 140,000- 25,000P QS = 20,000 + 75,000P, where Q = daily sales in 6 packs of beer, and P = price per 6 pack. The city has hired you to provide the following information regarding the beer market and the proposed tax.
a. What are the equilibrium values in the current environment with no tax?
b. What price and quantity would prevail after the imposition of the tax? What portion of the tax would be borne by buyers and sellers respectively?
c. Calculate the deadweight loss from the tax. What tax revenue will be generated?

Reference no: EM13198580

Questions Cloud

Positive entries in the output variable SSP : Write a MATLAB function “your first name” that will take a Matrix A as an input and compute the sum of the squares of the positive entries in the output variable SSP and the sum of the squares of the negative entries in the output variable SSN.

What is its de broglie wavelength : Consider a flea of mass 4.5×10-4 at 1.0 m/s midway through its jump. What is its de Broglie wavelength?

Explain establishment of a gang proposal : The criteria is as follows: The research proposal is just that; a proposal. That is, the student is being asked to select a topic (say gang prevention), and then develop a proposal which seeks funding (for example) in order to support the establis..

Find the output that will produce maximum revenue : The marketing research department for a company that manufactures and sells computers established the following price function : p(x)=2200-55x

What portion of the tax would be borne by buyers : QD = 140,000- 25,000P QS = 20,000 + 75,000P, where Q = daily sales in 6 packs of beer, and P = price per 6 pack. The city has hired you to provide the following information regarding the beer market and the proposed tax.

Long-running debate among wine producers-consumers : There is a long-running debate among wine producers, consumers, and critics as to what elements must be present and in what quantities for a wine to age gracefully. Discuss Tannins in relation to the ageability, or lack thereof, of a wine.

Express the cost of the window as a function : Clear glass costs $3 per square foot and stained glass costs $10 per square foot. Express the cost of the window as a function of the radius of the stained glass pane.

Define proposal for a criminal justice class : write a research proposal for a criminal justice class. The proposal has to have a topic and then develop a proposal to seek funding on the topic.

Calculate the change in producer surplus : The market demand and supply functions for milk are: QD = 58 - 30.4P and QS = 16 + 3.2P. If a price floor of $1.75 is implemented, calculate the change in producer surplus. How many surplus units of milk are being produced.

User Account

All Pages