: Ch. 7: In The United ×1 + Market I 87% O See Hint A study finds that the noise

Question

: Ch. 7: In The United ×1 + Market I 87% O See Hint A study finds that the noise from lawn mowers is harmful: hence, the amount accurately accounts for the external cost of the noise polution. Before the corrective tax, basic push mowers regularly sold for government imposes a $25 tax on the sale of every unit. This $190. After the tax is in place, the market price for basic push mowers rises to $200. Because of the tax,the number of basic push mowers sold will decresse The socially optimal price of basic push mowers is S 9 The private market price is S 20 A firm selling basic push mowers receives $ 200 after it pays the tax 2nd attempt K 0915 VIEW SOLUTION s VIEW SOLUTION SUBMIT ANSWER 25 MacBook Air

Explanation / Answer

1. Because of the tax, the number of basic push mowers sold will Decrease. Since, the price of the basic push mowers has increased becaue the tax, less people will be demanding the highly priced mower thus a fall in sales.

2. The socially optimal price of basic push mowers is $200.

3. The private market price is $190.

4. A firm selling basic push mowers receives $175 after it pays the tax. To calculate what the firm will receive after tax, we need to subtract the new price and the tax amount. Thus, $200- $25 = the amount the firm will get after paying the tax, i.e., $175

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