posted by Anonymous on .
Here's a picture of the question (since it's hard to make a properly formatted table here):
I tried finding this URL, but couldn't. Could you tell us something more about this website and the kind of table there?
The following information applies to the market for a particular item in the absence of a unit excise tax.
(Price, Quantity Supplied, Quantity Demanded):
Suppose that the government decides to subject producers of this item to a unit excise tax equal to $2 per unit sold. What is the new market price? (Hint: do not just add 2 to the previous equilibrium price.)
Here's the link.
Is this the answer:
($8, 100, 100)?
What portion of the tax is paid by producers?
Your answer is a bit brief, but correct. I would expand to say producers get $6 per unit and supply 100, Buyers pay $8 and receive 100, Uncle Same gets $2 each or $200
Prior to the tax, the equilibrium price was $7. Since the price to producers went down by $1 and the price to consumers went up by $1, (1/2) of the total tax was borne by producers.