The Maxwell School
Syracuse University
Syracuse University
Given:
The household always chooses 4 of the X good for each unit of Y
The supply of X is perfectly elastic at Px=$10
The supply of Y is perfectly elastic at Py=$6
The household spends $300 in total
The government levies a $1 tax on X and its price rises to $11
Determine:
The amount of revenue generated by the tax.