I need help with 32 and 34 Figure 18-2 shows the widget market before and after

Question

I need help with 32 and 34 Figure 18-2 shows the widget market before and after an excise tax is imposed. The tax per widget equals Figure 18-2 shows the widget market before and after an excise tax is imposed. After the tax is imposed, the amount that a firm keeps for itself from the sale of each widget is Figure 18-2 shows the widget market before and after an excise tax is imposed. The revenue collected by the tax is Figure 18-2 shows the widget market before and after an excise tax is imposed. What percentage of the tax per widget is borne by consumers, considering the true economic incidence of the tax?

Explanation / Answer

Answer31: $25 It is vertical distance between two supply curves. (125-100 or 120-95)

Answer32: $120 where new suopply curve intersects demand curve

Answer33: Tax revenue = 1,00,000 (Equilibrium quantity after tax multiplied by tax per unit = 4000* 25 = 1,00,000

Answer34: 80% (Total tax per unit = 25 Price rise = 20 and hence burden on consumers = 20/25*100 = 80%)

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