Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / The Commonwealth of Pennsylvania is the monopoly retailer of wine in the state
The Commonwealth of Pennsylvania is the monopoly retailer of wine in the state. Suppose that Quaker Cabernet has no close substitutes and that the statewide inverse demand function for this wine is
c) New Jersey taxes wine sales. While the retailers pay the taxes on wine sales, by raising prices they may pass on some or all of these taxes to consumers. Identify the specific tax (tax per bottle sold) for which New Jersey's equilibrium market price and quantity equal the Pennsylvania monopoly price and quantity. Given the quantity tax, show that New Jersey's tax revenue equals Pennsylvania's profit.
New Jersey's specific tax is $2.5 and its revenue is $_____. Round your answers to two decimal places
Pennsylvania's profit is $_____. Round your answer to two decimal places
Already member? Sign In
