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Unformatted text preview: Calculate the firm's profit (or loss). b. The Federal government is considering the imposition of a $15 per carload tax on soft coal. Calculate the short-run equilibrium price and quantity that would exist under the tax. What portion of the tax would be paid by producers and what portion by consumers? Calculate the producer and consumer surplus under the tax and analyze the efficiency consequences of the tax. Calculate the firm's profit (or loss) under the tax. Could the tax be justified despite its efficiency implications?...
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This note was uploaded on 12/28/2009 for the course ECON 120 taught by Professor Walsh during the Fall '09 term at University of Illinois, Urbana Champaign.
- Fall '09