price floors/ceilings
Would a binding price floor be above or below the equilibrium price
above
how is tax incidence determined?
price elasticity
If the buyers pay $0.50 in tax and sellers pay $1 in tax, how much would the government make in revenue if the quantity sold was 10
$15
would a surplus result from a price ceiling or floor
price floor
if suppliers have a price elasticity of 1 and buyers have a price elasticity of 3, who will bear the burden of tax
suppliers: less elastic = higher burden
when would tax have a beneficial effect on market outcomes?
It wouldn't
what is an example of a price ceiling
before tax, a cup of coffee costs $3. After tax, buyers pay $3.50 and sellers receive $2.75. what is the tax incidence on each?
buyers: 67%, sellers: 33%
Government revenue is 30$, the buyers pay $0.50 in tax for a total of $5.50. if the equilibrium quantity after tax is 20, how much would sellers receive from each good.
suppliers would receive $4