Assume the demand for beer is P =100-200 and the supply is P = 20 + 305 But consuming beer generates a negative externality of $10 per beer consumed. To address this, government implements a tax of $10 per beer on consumers. How much of this tax will consumers actually end up paying Answer 40%
Assume the demand for beer is P =100-200 and the supply is P = 20 + 305 But consuming beer generates a negative externality of $10 per beer consumed. To address this, government implements a tax of $10 per beer on consumers. How much of this tax will consumers actually end up paying Answer 40%
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter5: Difficult Cases For The Market And The Role Of Government
Section: Chapter Questions
Problem 5CQ
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