Taxes and transfers

Question 1

the government adds a $2 tax, how much does the consumer pay now for the product?

How much profit does the business make?

Answer 1

Consumers pay $4

Firm makes $2 (vertical distance from the equillibrium on the new supply curve and the old supply curve)

Question 2

Answer 2

1. $3 ($14-11)
2. 30 (3 x 10)
3. $20 [(14-12)]x 10
4. $10 (12-11) x 10
5. 140
6. 110

Question 3

who pays the tax?

Answer 3