(Answered) Question a cash-starved town decides to impose a 6 excise

Economics

Question: A cash-starved town decides to impose a $6 excise tax on T-shirts sold. The following table shows the quantity demanded and the quantity supplied at various prices.

835_T shirt.png

a. What are the equilibrium quantity demanded and the quantity supplied before the tax is implemented? Determine the consumer and producer surplus before the tax.

b. What are the equilibrium quantity demanded and the quantity supplied after the tax is implemented? Determine the consumer and producer surplus after the tax.

c. How much tax revenue does the town generate from the tax?

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Macroeconomics, Economics

Category:- Macroeconomics
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