3 . Effect of a tax on buyers and sellers

The following graph shows the weekly market for craft beer in some hypothetical economy. Suppose the government levies a tax of $23.20 per case. The tax places a wedge between the price buyers pay and the price sellers receive.

\fComplete the following tabie by filling in the guantity sold, the price buyers pay, and the price sellers neceive before and after the tax. Quantity Price Buyers Pawr Price Sellers Receive ( Cases of craft beer) ( Dollars per case) (Dollars per case J Beinre Tax E E |:| Using your answers from the previous table, calculate the tax burden that fails on buyens anol on sellers, respectively, and calculate the price elasticity of demand and supply over the reievant ranges using the midpoint method. Enter your results in the following table. Tax Burden 1' Dollars per case J Elasticity Buvers E _' Sellers E _' - I'I'IDI'E The tax burden falls more heavily on the side ofthe market that is v elastic. Complete the following table by filling in the quantity sold, the price buyers pay, and the price sellers receive before arid after the tax. Quantity Price Buyers Pay Price Sellers Receive ( Cases of craft beer) {Dollars per case J ( Dollars per case J Using your answers from the previous lcuiate the tax burden that fails on buyers and on sellers, respectively, ario' calculate the price elasticity of demand and supply over the releva using the midpoint method. Enter your results in the following table. Tax Burden { Dollars per case ) El E E Buyers Sellers The tax burden falls more heavily on the side of the market that is V elastic.