Ludlow Bushmatte brews, bottles, and sells the best root beer in Sugartown. Ludlow estimates his weekly demand function for cases of root beer to be Qp = 1000 - 10p, and the weekly supply function to be Qs = 5p - 200. Sugartown's new mayor, Jim Kinney, believes that all that root beer is no good for the health of the townspeople, so he imposes a tax on Ludlow's root beer of $30 per case.
Complete the table below. USE THE ANSWER SHEET AND SHOW YOUR WORK
Equilibrium Equilibrium Root Beer Tax % of tax paid Price Quantity Revenue/Week Revenue/Week by consumers
Before tax
After tax