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Q: Suppose that the demand for vodka is P = 50 ? 2Q, and Supply is P = 3Q. The government is considering levying a $1

Suppose that the demand for vodka is P = 50 ? 2Q, and Supply is P = 3Q. The government is considering levying a $1 tax on vodka producers.

a) Graphically show, and arithmetically solve for, how the tax changes the equilibrium quantity and price.

b) How much revenue does this tax raise? How much revenue comes from consumers, and how much from producers?

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a Beforetax equilibrium P 10 and Q 300000 Q D Q S 50000020000P30000P 50000... View full answer

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