Suppose that the demand for digital picture frames is price elastic and the supply of digital picture frames is price inelastic. By what amount will a tax of $1.00 per frame levied on buyers of picture frames increase the equilibrium price paid by buyers of picture frames? by less than $0.50 by $1.00 by more than $0.50 but less than $1.00 by more than $1.00
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- Suppose that the demand for digital pianos is price inelastic and the supply of digital pianos is price elastic. By what amount will a tax of $1.00 per piano levied on buyers of pianos increase the equilibrium price paid by buyers of digital pianos? by $1.00 by less than $0.50 by more than $0.50 but less than $1.00 by more than $1.00Suppose an economist estimates the price elasticity of demand for sugary drinks is -4.2, while its price elasticity of supply is 1.2. If the government decides to impose a per-unit tax of $9 per can of sugary drinks sold, how would the market price of sugary drinks be affected? Show your calculationSuppose an economist estimates that the price elasticity of supply for red wine is2.4 while its price elasticity of demand is -4.0.If the government decides to impost a per-unit sales tax of $40 per bottle of redwine, how would the market price for red wine be affected? Show yourcalculation.
- Suppose producers bear most of the burden of a specific tax of 20 cents on staplers. Which ONE statement best describes the supply and demand for staplers? Suppose sandals have an elastic own-price elasticity of demand. If price goes up by 2%, then what happens to quantity demanded?In the state of Santa Lucia cigarettes were selling for $8.03 per pack before a $0.25 per pack increase. Last year about 3.8 million pack of cigarettes were sold per month at $8.03 per pack. The price elasticity of demand for cigarette packs is -1.35. How much revenue, in millions of dollars, will be produced each month from this new tax?Suppose demand is D and supply is S0 so that equilibrium price is $10. If an excise tax of $6 is imposed on this product, what happens to the equilibrium price paid by consumers? The price received by producers? The number of units sold?Equilibrium price paid by consumers: $ Price received by producers: $ Number of units sold:
- If a tax of $1.20 is imposed on consumers in this market, what is the tax revenue?Suppose that the demand for tea in Boston is described by Quantity demanded = 20-p and the quantity supplied = 2p-4. What would be the price paid by consumers if there was a 6 dollar tax on tea?Suppose an economist estimates the price elasticity of demand for instant noodle is -2.4, while its price elasticity of supply is 4.0. If the government decides to impost a per-unit sales tax of $16 per pack of instant noodle, how would the market price for instant noodle be affected? Show your calculation.
- Question 2e - part 2 Given the following information Q = 240 - 5P Qs = P where Q, is the quantity demanded, Qs is the quantity supplied and Pis the price. Suppose that the government decides to impose a tax of $12 per unit on sellers in this market. Determine: Seller's pnice after taxSuppose that in a certain market the demand function for a product is given by p =−8q + 2800 and the supply function is given by p = 3q + 45. Then a tax of $5 per itemis levied on the supplier, who passes it on to the consumer as a price increase. Findthe equilibrium price and quantity after the tax is levied.The government has imposed an indirect tax on good A and the coefficient of the price elasticity of demand is >1? Explain and demonstrate with the use of appropriate diagrams the effect of this tax on both buyer and seller?