2-G AP Microeconomics Excise Tax Practice - Elasticity and Excise Taxes Who ends up paying for an excise tax 1 EXCISE TAX ON CIGARETTES P Demand

2-G AP Microeconomics Excise Tax Practice - Elasticity and...

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Elasticity and Excise TaxesWho ends up paying for an excise tax? 1
S P Q D Demand- Inelastic Supply- Unitary $10 8 6 5 4 2 $2 TAX on Producers 10 8 EXCISE TAX ON CIGARETTES CS 2
S P Q D $10 8 7 6 5 4 2 $2 TAX on Producers 10 9 S 1 $6.50 =P consumers $4.50 = P producers Quantity Doesn’t Fall VERY Much!!! Amount Producers Pay Amount Consumers Pay CS After EXCISE TAX ON CIGARETTES 3
S P Q D Demand- Elastic Supply- Unitary EXCISE TAX ON YACHTS $10 8 6 5 4 2 $2 TAX on Producers 10 8 4
S P Q D $10 8 6 5 4 2 $2 TAX on Producers 10 7 S 1 P c P p DWL? Quantity Falls A lot!!! EXCISE TAX ON YACHTS 5
S P Q D $10 8 7 6 5 4 2 1. Tax per Unit? 2. Total Tax Revenue?

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