Problems and Applications Q4

Use the following graph of the market for cases of beer to answer the questions that follow. (Note: You will not be graded on any changes you make to the graph.)

Scratch points012345678910109876543210Price of Beer (Dollars per case)Quantity of Beer (Thousands of cases)DemandSupply

Complete the first row of the following table by entering the price paid by consumers, the price received by producers, and the quantity of beer sold in the absence of a tax on this market.

Tax	Price Paid by Consumers	Price Received by Producers	Quantity of Beer Sold
(Dollars per case)	(Dollars per case)	(Dollars per case)	(Thousands of cases)
0
4

Suppose the federal government requires beer drinkers to pay a $4 tax on each case of beer purchased. (In fact, both the federal and state governments impose beer taxes of some sort.)

Complete the second row of the above table by entering the price paid by consumers, the price received by producers, and the quantity of beer sold when beer drinkers pay a $4 tax on each case of beer.

As a result of the tax, the price producers receive