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Flashcards in Taxes and transfers Deck (3)
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1
Q

the government adds a $2 tax, how much does the consumer pay now for the product?

How much profit does the business make?

A

Consumers pay $4

Firm makes $2 (vertical distance from the equillibrium on the new supply curve and the old supply curve)

2
Q
A
  1. $3 ($14-11)
  2. 30 (3 x 10)
  3. $20 [(14-12)]x 10
  4. $10 (12-11) x 10
  5. 140
  6. 110
3
Q

who pays the tax?

A