What is the effect of a $1 specific tax on equilibrium price and quantity if demand is

Question:

What is the effect of a $1 specific tax on equilibrium price and quantity if demand is perfectly elastic? What is the incidence on consumers? Explain.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Microeconomics

ISBN: 978-0134519531

8th edition

Authors: Jeffrey M. Perloff

See More Books

Question Posted: Nov 12, 2018 06:14 AM

See More Questions

What is the effect of a minimum wage law in a monopsony labor market?
What is the effect of external factors on earnings quality?
What is the effect of capitalizing interest costs associated with self-constructed assets on reported income summed over all the periods of the life of a given self-constructed asset, from building...
A stiff, straight, horizontal wire of length 25 cm and mass 20 g is supported by electrical contacts at its ends, but is otherwise free to move vertically upward. The wire is in a uniform, horizontal...
Suppose a diver springs into the air with no initial angular velocity. Can the diver begin to rotate by folding into a tucked position? Explain.
Carla Vista Boxes uses a petty cash imprest system. The fund was established on February 14 with a balance of $98. On February 28 , there were $5 cash and the following petty cash receipts in the...
The expression for the relativistic momentum (Eq. 27.24) contains the factor m 0 1- v 2 /c 2 . For an electron, if this factor is five times the rest mass, what is the speed of the electron?
Miller Enterprises deposits the cash received during each day at the end of the day. Miller deposited $48,287 on October 3 and $50,116 on October 4. Cash register records and other documents...
Bird House Manufacturing ( BHM ) installed a computerized machine in its factory at a cost of $ 2 5 0 , 0 0 0 on January 1 , 2 0 2 3 . The machine has an estimated useful life of five years or a...
Adam Fleeman, a skilled carpenter, started a home improvement business with Tom Collins, a master plumber. Adam and Tom are concerned about the payroll taxes they will have to pay. Assume they form...
If the demand elasticity is -1 at the initial equilibrium and price increases by 1%, by how much does revenue change?
What is the effect of a $1 specific tax on equilibrium price and quantity if supply is perfectly inelastic? What is the incidence on consumers? Explain.
Upon reviewing Paragraph 4 and realizing that some information has been left out, the writer composes the following sentence: Little by little, I see him enjoying the pleasures of our digital world....
Use the Comprehensive Annual Financial Report for the Village of Arlington Heights (please look up this content) for the year ended December 31, 2018, to answer questions 8-20. All questions are on...
The pulse rates of 152 randomly selected adult males vary from a low of 37 bpm to a high of 117 bpm. Find the minimum sample size required to estimate the mean pulse rate of adult males. Assume that...
Two wires lie perpendicular to the plane of the screen and carry equal magnitudes of electric current in the directions shown. Point P is equidistant from the two wires. The distance between each of...
Your firm has recently been appointed as auditors of Kentronics Ltd , a large company which markets sophisticated electronic equipment for heavy industry as well as the mining equipment industry. The...
The pulse rates of 152 randomly selected adult males vary from a low of 37 bpm to a high of 117 bpm. Find the minimum sample size required to estimate the mean pulse rate of adult males. Assume that...
Let (t) be a function defined for all positive values of t. The Laplace Transform of (t) is defined by when the improper integral exists. Laplace Transforms are used to solve differential equations....
Diamond Walker sells homemade knit scarves for $25 each at local craft shows. Her contribution margin ratio is 60%. Currently, the craft show entrance fees cost Diamond $1,500 per year. The craft...
There are certain fixed costs when you own a plane, [Andre] Agassi explained during a break in the action at the Volvo/ San Francisco tennis tournament, so the more you fly it, the more economic...
Give the formulas for and plot AFC, MC, AVC, and AC if the cost function is a. C = 10 + 10q, b. C = 10 + q2, or c. C = 10 + 10q - 4q2 + q3. C
Give the formulas for and plot AFC, MC, AVC, and AC if the cost function is a. C = 10 + 10q, b. C = 10 + q2, or c. C = 10 + 10q - 4q2 + q3. C
Difference between Operating Leverage and Financial Leverage
bpmn diagram for misc purchases
You have $55,000. You put 15% of your money in a stock with an expected return of 10%, $38,000 in a stock with an expected return of 18%, and the rest in a stock with an expected return of 22%. What...

What is the effect of a $1 specific tax on equilibrium price and quantity if demand is

Question:

Step by Step Answer:

The demand curve is horizontal when perfectly elastic The supply curve shifts ...View the full answer

Microeconomics

Students also viewed these Business questions