Question: Use calculus to show that an increase in a specific sales tax t reduces quantity less and tax revenue more, the less elastic the demand

Use calculus to show that an increase in a specific sales tax t reduces quantity less and tax revenue more, the less elastic the demand curve. (The quantity demanded depends on its price, which in turn depends on the specific tax, Q(ρ(τ)), and tax revenue is R = r (τ)Q(ρ(τ))?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Differentiating quantity Q p with respect to we learn that the ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

PART 5 PART.7 PART 8 Comprehensive Problem 2 Part 1 and Part 2: Palisade Creek Co. is a retail business that uses the perpetual inventory system. The account balances for Palisade Creek as of May 1,...

6.8 Use calculus to show that an increase in a specific sales tax reduces quantity less and tax revenue more, the less elastic the demand curve. (Hint: The quantity demanded depends on its price,...

Use calculus to show that an increase in a specific sales tax ( reduces quantity less and tax revenue more, the less elastic the demand curve. (The quantity demanded depends on its price, which in...

Use calculus to show that an increase in a specific sales tax reduces quantity less and tax revenue more, the less elastic the demand curve. (Hint: The quantity demanded depends on its price, which...

13.Assume that Bart and Lisa live on a desert island. With a day's labor, Lisa can produce either 5 fish or 4 coconuts; Bart can produce either 6 fish or 3 coconuts. Based on the law of comparative...

*6.8 Use calculus to show that the less elastic the demand curve, an increase in a specific sales tax t reduces quantity less and tax revenue more. (Hint: The quantity demanded depends on its price,...

1. *6.8 Use calculus to show that the less elastic the demand curve, an increase in a specific sales tax t reduces quantity less and tax revenue more. (Hint: The quan tity demanded depends on its...

A good economic theory: a. includes every detail that affects the economic behavior of interest. b. relies on simplifying assumptions in order to explain economic behavior. c. does not rely on...

80 10 X08 Priority: MBA 644 Managerial Economics Final Exam CH 8-13 Spr 24 Brennan 10000 -urey 18) The suggestion that a seller will try to set price based on "what the market will bear" is explicit...

9:59 L X LaToya Owens Gilmore _Bu... 4. Accounting and nance principles work the same whether revenue is in the hundred of dollars or hundreds of millions of dollars and whether the calculations are...

1.A change in supply will cause the equilibrium price to change by______________and the equilibrium quantity to change by______________with an elastic demand than if demand were inelastic. a.more;...

Using the following diagram, what payments c would make the 2 diagrams C equal at an interest rate of 8%? 57 5 6 10 250 20 3c 3c 750 If an interest rate of 8% per year, determine the unknown quantity...

An investigator wants to know the total number of participants for a clinical trial to test the efficacy of a novel intervention compared to a standard treatment among diabetes patients. Assuming the...

Which of the following is NOT included as part of the Management Expense Ratio ( MER ) charged by companies that issue Mutual Funds? a . mutual fund company peofits b . administration and solary c ....

In Exercises use a graphing utility to graph the function. Then use the Horizontal Line Test to determine whether the function is one-to-one on its entire domain and therefore has an inverse...

You expect the price of a certain painting to rise by 8% per year forever. The market interest rate for borrowing and lending is 10%. Assume there are no brokerage costs in purchasing or selling. (a)...

Ashley is thinking of buying a truckload of wine for investment purposes. He can borrow and lend as much as he likes at an annual interest rate of 10%. He is looking at three kinds of wine. To keep...

Fisher Brown is taxed at 40% on his income from ordinary bonds. Ordinary bonds pay 10% interest. Interest on municipal bonds is not taxed at all. (a) If the interest rate on municipal bonds is 7%,...

Evergreen Company sells lawn and garden products to wholesalers. The company's fiscal year-end is December 31. During 2021, the following transactions related to receivables occurred: Feb. 28 Sold...

1.2 Distinguish between inventoriable costs and period costs. 1.3 Define a cost driver and provide Two(2) examples (3 marks) (2 marks)

12 Not yet answered Marked out of In a perpetual Inventory system, the Cost of Goods Sold account is used 1.00 Flag question Select one: a. whenever there is a sale of merchandise or a return of...