Question

Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 10 million cases of beer were sold every month at a price of $4 per case. After the tax, 3 million cases of beer are sold every month; consumers pay $7 per case, and producers receive $2 per case (after paying the tax). The amount of the tax on a case of beer is $________ per case.

Answer 1

Answer:

$5 per case

Explanation:

Calculation for what The amount of the tax on a case of beer is $ per case.

Using this formula

Tax = Price Consumers Pay−Price Producers Receive

Let plug in the formula

Tax= $7 per case−$2per case

Tax=$5 per case

Therefore The amount of the tax on a case of beer is $5 per case