Market equilibrium and policy 2
A tax imposed to buyers
Shifts the demand curve down, because a portion of the price of the food pays the tax a
Supplies have an incentive quantity supplied when there is a____ in a competitive market
Shortage
When a shortage is eliminated the market:
Returns to equilibrium where the quantity supplied equals the quantity demanded
The quantity traded times the tax equals the tax
Revenue
An excise tax is a tax on
A good or service that depends on the units sold
When a tax is imposed on a market
Both producers and consumers are affected no matter who pays the tax
Rent control is an example of a price _______
Ceiling
A price floor will
Change the incentives that both buyers and sellers face.
The tax on a good or service that depends on the units sold, not the price of the food or service is called the _____ tax
Excise
Taxes paid by demanders help fund
Government services
A shortage persists when
Price is not allowed to adjust upward
Taxes are generally imposed to:
Raise revenue to fund government activities and discourage people from consuming a particular good or service
When there is a shortage in the market consumers tend to:
Reduce the quantity consumed
The quantity traded times the tax equals
The tax revenues from a tax
When both demand and supply change
We can always determine with confidence how price of quantity will change, but not both