Hotel rooms in Smalltown go for $100, and 800 rooms are rented on a typical day.

To raise revenue, the mayor decides to charge hotels a tax of $12 per rented room. After the tax is imposed, the going rate for hotel rooms rises to $110, and the number of rooms rented falls to 700.

Use the following graph to help you answer the questions that follow. You will not be graded on any changes you make to this graph.

Scratch Demand

Scratch Supply

Scratch Points

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Price of Hotel Rooms

Quantity of Hotel Rooms

This tax raises $_____ in government revenue and causes a deadweight loss of $_____in this market.

The mayor now doubles the tax to $24. The price rises to $120, and the number of rooms rented falls to 600.

This higher tax raises $______in government revenue and causes a deadweight loss of $_____in this market.

When the tax is doubled, the tax revenue rises by (exactly, less than, more than) double, and the deadweight loss rises by (exactly, less than, more than double.