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Page 3 of 20 ZOOM + Wendy Kurtz, owner of The Blouse Barn, sells blouses (shirts) in a perfectly competitive market. The initial market price
Page 3 of 20 ZOOM + Wendy Kurtz, owner of The Blouse Barn, sells blouses (shirts) in a perfectly competitive market. The initial market price for a standard blouse is $P. After the government imposes a per-unit excise tax of T, the price Wendy believes she receives is $(P - 0.757) Use this information for the following 2 questions. 4. (Buying Blouses) After the tax, the price consumers feel they pay at the Blouse Barn is a. $(P + 0.25T) b. $(P + 0.75T) C. $(P + 0.50T) d. None of the above. 5. (Buying Blouses) Which of the following statements must be true? a. Demand for blouses is more elastic than supply of blouses. b. Consumers face a greater tax incidence in the blouse market. c. A per unit tax of 10*T would raise more tax revenue than the current tax of T. d. All of the above. Twyla buys the napkins for the Cafe Tropical in a perfectly competitive market with no
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