Figure 1 (ATTACHED/BELOW) shows the market mangoes. A tax is levied on mangoes.
a. Provide the correct labels for Curve 1, Curve 2, and Curve 3.
b. Before the tax was implemented, the government introduced a price floor of $15 per bushel of mango. Explain how the price floor impacted the market for mangoes.
c. Specify the equilibrium tax and quantity prior to the tax.
d. What is the tax per bushel of mango?
e. How many mangos are sold after the tax is implemented?
f. What is the value of the tax revenue?
g. What is the value of the buyer’s tax burden?
h. Who bears the greater tax burden?
i. Compare the price elasticity of supply to the price elasticity of demand.