Miller wants to discourage the energy drink market with a $2 tax on energy drinks (that on average cost $2.50) Cruz thinks the tax is too high, so Miller makes the tax $1. draw a graph with the demand curve, supply curve, equilibrium price/quantity, tax price, tax incidence, tax revenue, and dead weight loss. Locate the tax revenue and indicate which letters show that on the graph. Who pays more of the tax- consumers or producers? How does the graph show this?
Miller wants to discourage the energy drink market with a $2 tax on energy drinks (that on average cost $2.50) Cruz thinks the tax is too high, so Miller makes the tax $1. draw a graph with the demand curve, supply curve, equilibrium price/quantity, tax price, tax incidence, tax revenue, and dead weight loss. Locate the tax revenue and indicate which letters show that on the graph. Who pays more of the tax- consumers or producers? How does the graph show this?
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter6: Demand And Elasticity
Section: Chapter Questions
Problem 3TY
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Miller wants to discourage the energy drink market with a $2 tax on energy drinks (that on average cost $2.50) Cruz thinks the tax is too high, so Miller makes the tax $1.
draw a graph with the demand curve, supply curve,
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