Attempts| 1.8 Keep the Highest 1.8 / 3 7. Effect of a tax on buyers and sellers The following graph shows the daily market for wine. Suppose the government institutes a tax of $40.60 per bottle. This places a wedge between the price buyers pay and the price sellers receive. (? 200 180 180 Demand Supply 140 20 PRICE (Dollars perbottle) Tax Wedge 10 20 30 40 50 60 70 80 90 100 QUANTITY (Bottles of wine) Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Quantity Price Buyers Pay Price Sellers Receive (Bottles of wine) (Dollars per bottle) ( Dollars per bottle) Before Tax 50 100.00 100.00 After Tax 45 105.00 Using the data you entered in the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity of demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table. Tax Burden (Dollars per bottle) Elasticity Buyers 0.35 Sellers 2.76 The burden of the tax falls more heavily on the more * elastic side of the market