How much revenue is raised by the tax

Assignment Help Business Economics

Reference no: EM13774358

The government imposes an excise tax on the sale of all toothbrushes. Before the tax, 2 million toothbrushes were sold every year at a price of $1.50. After the tax is imposed, 2 million toothbrushes are sold every year; consumers pay $2 per toothbrush, $1.50 of which producers receive. Assume demand and supply is linear.

a. How much revenue is raised by the tax?

b. Find the ratio of efficiency loss to tax revenue.

Reference no: EM13774358

Questions Cloud

Produce output according to the production function : A firm uses labor and machines to produce output according to the production function f(L, M) = 4L^1/2 M^1/2 , where L is the number of units of labor used and M is the number of machines. The cost of labor is $40 per unit and the cost of using a mac..

What justifies criminalizing attempt solicitation : What justifies criminalizing attempt, solicitation, and conspiracy? Should statutes defining conspiracy require proof of an overt act in furtherance of the conspirators' agreement? Why or why not

Assignment on data warehouses and network infrastructure : Imagine that you are an IT organizational leader in a mid-sized company. Comprise a justifiable argument for the use of data warehouses, data centers, and data marts in order to support for business intelligence (BI) within the organizational stru..

Use static supply and demand theory : What is the best way to use static supply and demand theory to analyze a dynamic world which is constantly changing?

How much revenue is raised by the tax : The government imposes an excise tax on the sale of all toothbrushes. Before the tax, 2 million toothbrushes were sold every year at a price of $1.50. After the tax is imposed, 2 million toothbrushes are sold every year; consumers pay $2 per toothbru..

Discuss and contrast extrinsic versus intrinsic motivation : 1 Discuss and contrast extrinsic versus intrinsic motivation. Give an example of each type of motivation from your personal experience. 2 Describe Maslow's hierarchy of needs. Provide an example of a deficiency need overpowering the need for growth. ..

The slope of the total product curve : The slope of the total product (output) curve is the

Federal agencies to publish in the federal register : What is the difference between riparian and appropriative water rights? Under what conditions is each of these most suited? Provide a reference citation for your source material. There is no minimum word requirement for your written response.

Write review of article america needs to use less chemicals : Write a review of the article "America Needs to Use Less Chemicals".

User Account

All Pages