the following graph shows the supply and demand curves for airbnb rentals in the hypothetical economy of homeyville in $2010,$ two years after airbnb lauched, the equilibrium quantity of rentals was $320$ rooms per day, and the equilibrium price was $140$ per room. at the time,homeyville was enforcing tax regulationson the market for hotels, but it hadn't yet initiated a tax arrangment on room through airbnb.

on the following graph, use the green rectangle to indicate the tax revenue the government could have collected in $2010$ if it had levied a $20$ per room tax on airbnb rentals.

realizing that there is a great potential for increased tax revenue, government officials in homeyville began discussing how they could align airbnb rentals with hotel stays from a tax perspective. fast foward to $2018,$ at which time homeyville has finally made tax arrangements with airbnb to levya $30$ per room tax on rentals, however, now the market conditions have changed. more hosts have now entered the airbnb market, and awareness of this total alternative jas increased demand. the following graph shows the demand and supply curves for airbnb rentals in $2018$

use the green rectangle to illustrate the arearepresents the revenue raised by $20$ per room tax. then usee the black point to shade the area representing the deadweight loss generated by this tax.

the demand for airbnb rooms has not only shifted to the right, but it has also become relatively$\_\_\_\_\_\_\_$elastic since $2000$

comparing the market for airbnb rentals for two years is complecated by the fact that the graph depicts threee changes: total demand increases $,$ total supply increases, and the slope of the demand curve changes. to isolate the effect of elasticity on deadweight loss and government revenue, consider the following scenario:

suppose the government wants to estimate the tax revenues from rentals for $2030$ and economic models predicttwo different scenarios each with a different demand curve respectively on the following graph.

use the objects to the right of the graph to help determine the potential deadweight loss and revenues generated by the same $20$ tax in$2030$ under each scenario and enter the values into the following table.

scenario deadweight loss tax revenue.

a $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

b $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

under scenario a$,$ demand is relatively$\_\_\_\_\_\_\_$ elastic, and the tax results in a$\_\_\_\_\_\_\_\_$ deadweight loss and $\_\_\_\_\_\_\_\_\_$government revenue than under scenario b$.$ this suggest that $,$all other things beign equal the governmentshould tax industries with a relatively$\_\_\_\_\_\_\_$elasticity of demand if it wants to minimize deadweight loss