1. Using the graph shown, answer the following questions. a. What was the equili
ID: 1177522 • Letter: 1
Question
1. Using the graph shown, answer the following questions.
a.
What was the equilibrium price in this market before the tax?
b.
What is the amount of the tax?
c.
How much of the tax will the buyers pay?
d.
How much of the tax will the sellers pay?
e.
How much will the buyer pay for the product after the tax is imposed?
f.
How much will the seller receive after the tax is imposed?
g.
As a result of the tax, what has happened to the level of market activity?
a.
What was the equilibrium price in this market before the tax?
b.
What is the amount of the tax?
c.
How much of the tax will the buyers pay?
d.
How much of the tax will the sellers pay?
e.
How much will the buyer pay for the product after the tax is imposed?
f.
How much will the seller receive after the tax is imposed?
g.
As a result of the tax, what has happened to the level of market activity?
Explanation / Answer
1.$5
2. $3
3. $2
4. $1
5. $7
6. $4
7. As a result of the tax, the level of market activity has fallen, from 10 units
bought and sold to only 8 units bought and sold
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