How to calculate Excise Tax and determine Who Bears the Burden of the Tax
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- Опубликовано: 1 окт 2024
- Tutorial on how to calculate total revenue from taxes. The animation shows how total revenue changes with elasticity It shows how the share between producer and consumer when the demand for elasticity changes too.
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Thank you sooo much!! Ugh why is this so much easier to understand for free than the actual person that im paying in college.
tell me about it :(
Lmao, college in the modern era is basically: RUclips
Sometimes I just think that it would be better to get a course's curriculum from the university website and then find RUclips videos according to each topic. Not even textbooks are helpful nowadays. They just basically beat around the bush.
who are you? you are God
idiot
5 shitty econ professors didn't like the fact that this video is more useful than they are
+Jan Balbin PROF GOOOOOUPAAAH! FOR THREEEEEEEEEEEE FROM MILES AWAY NIGGA
You are very welcome. Make sure you like MyBookSucks on Facebook (you can see the link in the video description). This will help me spread the word about the free videos.
This helped so much with my assignment! thank you:)
Meghan w You are very welcome. Hopefully, you will get a chance to like and share the videos. It will help other students find the videos. Good luck in your studies too.
im now studying MICROECONOMICS for my exam tomorrow . I find this really help me . Thanks a LOT !
You are very welcome. Make sure you like MyBookSucks on FaceBook (see link in video description). This will help others find the educational videos.
Thank you for the compliments. I do have some videos on Monopolies. If you go to the channel statisticsfun, then you will see a playlist on monopolies. RUclips does not let me add links.
You are very welcome. I hear that from students a lot, they get confused in class. I have always thought economics lends itself to animation. Good luck in your studies too!
Make sure you like MyBookSucks on FaceBook (see link in video description). This will help others find the educational videos.
Assalamu alikumm sir.
Thank you so much for this video. It helps to understand how to calculate incidence of taxation easier ❤️.
We want more videos like this ❤️❤️❤️.
consumers pay more tax burden with inelasteic demand, tax revenue rectangle is larger. producers pay more tax burden with elastic demand, tax revenue rectangle is smaller
You managed to teach me more in 7 minutes than hours I spent on my professors material. Thank you!!!!!
Your video lectures on statistics got me a solid grade in my intro to statistics class. Same with your microeconomics.
I'd love to see you take on macro-economic principles as well!
Thank you for your fantastic video on how to determine who bears the burden of tax. You have been immense help! Thumbs up emoji :)
Cannot just believe that this was explained 11 years ago
Supply is impacted because producers have to charge a higher price (price + tax). In this case it is a $3 tax above the market equilibrium price. At a higher price quantity demanded is less. The producers (or supply) actually on gets $6, so they are willing to supply less.
Elastic products are products that have a lot of choices, such as cell phones these days. Another good choice would be wine. While alcohol is regulated and taxes wine is elastic because there are so many choices and no one firm dominates the market.
Good question. I have an entire playlist on elasticity. I added a link to that playlist in this videos description. Hope that helps.
another option would be transportation (airline tickets are heavily taxes), gasoline (if you drive), train tickets, or even a bus ticket. These are all modes of transportation that are taxed.
You are very welcome! Make sure you like MyBookSucks on FaceBook (see link in video description). This will help me save the life's of other students to :)
What if only prices are given, and not quantities?
I just want to ask when the government impose taxes policy, why we shift the supply curve instead of demand curve
this taxation policy is of indirect taxes on a good.. e.g. sales tax or production tax or service tax.... so these taxes affect supply as it is increases the cost of suppliers...
It is because the tax imposition is mainly effected on the supplier or producer which directly affects the quantity supply of goods and price as well.
Thank you so much. My teacher went over this extremely quickly in class, making it hard to keep up. Now, I understand everything after watching your simple example. :)
i dont get why quantity is 4 and price is 9 if tax is 3
Same here. Anyone know the answer?
Great video, i'm taking Microeconomics online and i had to figure this out in a book so it was harder to understand by just reading it. visually seeing how to do it is so much better.
Oscar, I am not sure I understand your question. The actual calculation would depend on the elasticity of demand and how sensitive demand is to changes in price. If demand is inelastic, then a tax will have little impact. If demand is elastic small tax will have a large impact.
VAT is going to be split between consumers and producers. VAT is just another form of retail tax. Too much VAT will causes prices to be higher and thus less of a product or service will be demanded.
You are very welcome! Cool user name Yummycookies.
Make sure you like MyBookSucks on FaceBook (see link in video description). This will help other students find the educational videos.
You are very welcome. I appreciate your feedback and it is much appreciated. If you have not done so, make sure you like MyBookSucks on Facebook (see link in video description). This will help others find the educational videos.
Good luck in your courses too!
Good to hear. Btw, make sure you like "MyBookSucks" on FB. It contains humorous things like my freshman ID and funny college humor vids.
Great to hear and good luck 007!
Yes, that is a good idea and interesting for me to consider. You are referring to "Capital Market Equilibrium", right?
I do have a lesson with "Edgeworth Box" which sort of gets to your question. You can search the channel economicsfun to find the video.
What determines the math behind the burden the producer and consumer have? Why is it like it is? Why is it optimal for the consumer to only pay 1/3rd and the producer 2/3rds?
Im having trouble finding which one is the before consumer spending and after consuming spending, also which one is the before producer revenue and the after producer revenue, and trying to find the tax on the govt ;--p
That is a good idea -- to do the same type of analysis using equations and not just graphs. I don't have that done yet, but plan to in the very near future.
What a great compliment thank you!
Make sure you like MyBookSucks on FaceBook (see link in video description). This will help others find the educational videos.
Hi guys, please help me solve this constraints,
The government is interested in taxing sugar in order to increase its tax revenue. The market is currently at equilibrium at a price of Ksh. 10 per kg and sales of 1000 kgs per month. Suppose that own price elasticity of demand at the equilibrium point is 0.1 and the own price elasticity of supply at this point is 0.2. The government announces that the tax measure with the new market price to be maintained at Ksh 15 per kg.Required(a) Compute and show the suppliers and buyers tax burden.(b) How much will the government get from the new tax measure?(c) Calculate the dead weight loss of the tax (excess burden of the tax).
Thanks you for such a nice compliment... I guess you are telling me, "My Book Sucks" :). And yes, Adobe illustrator is one of the tools I use.
These videos are extremely helpful. Thanks. I appreciate it a ton!
What's the equation to find the quantity of 4 and price of 6 ...
Did you ever get the answer to that?
That's where I'm stuck!
Literally same thing I need. Like this guy just knows whats going on and I need to calculate it.
Qs=100+3p Qd=60+6P
set equations equal
100=3p+60
40=3p
p=40/3
plug answer back in to equation
Sounds like the guy from burn notice... good vid thanks :)
Suppose the Government removes the sin(excise) tax on cigarettes and levies the same amount of tax to the smokers. How does thus change in tax policy affect the equilibrium price and quantity of the cigarettes? How to Illustrate and Explain? 🙏🙏🙏
why is the motto party more, study less?
You explain everything so nicely and smoothly. This was really helpful, thank you!
How are you doing 8 years later?😂
Thanks man...Really helpful
Love from Africa ❤❤
How do I calculate subsidy
I was given a question,gives Qd=497-2p
Qs=P-34
Determine the equilibrium price and quantity with tax 6$ and subsidy 3$
How can I solve this please?
I could've sworn I've learned this last last quarter, yet I completely forgot. Econ really isn't for me ;v;
Hello, what happenes in the case of VAT? isn't VAT indirect and supported entirely by consumers? so if equilibrium price is $8 and VAT is let's say 10% the new price will be 8.8 so who bears 0.8? how can this be represented?
pls answer me for this questiontax on
alcohol is the most effective way to reduce alcohol abuse in our society. Do
you agree or disagree? Explain why or why not.through the demand and supply curve
But they are all inelastic. Do you have an elastic products in mind that I can do a lot of research on and explain it based on how it affects any government like Canada?
hi i have a question. if the retail price of cigarette is $15 and $6 is retained by supplier and $9.00 is tax. where am i gonna start? which is my equilibrium price?
Why not demand curve shift because of excise tax, why supply curve shift only to show increase in prices
It’s not clear why you calculate the tax payable per unit as the difference between the new equilibrium price and the old equilibrium price. The $8 price is not attainable after the the tax is introduced so I don’t understand why you use it to calculate the tax burdens.
Hey I have seen many videos of your including statistics also. Must tell u..ur doin a great job thnks. Keep uploading! M gona subscribe it.
Why does the producer only get 6 dollars? Isn't the tax double counted. I thought it's the customer that had to pay the tax, the firm collects said payment then give the tax portion of the payment to the government.
please please Please. Add more videos on various Topics related with Economics. You are awesome.
That is wonderful to hear. Good luck in your classes too. By the way, where do you go to school (country?)
the more inelastic demand is the less the dead weight loss from the per-unit tax. can you explain why?
Thank you so mcuh for this helpful video ⭐️⭐️
If a tax is levied on the consumer, would the tax be added to the demand curve? or is it still added to supply?
Typically a tax levied on a consumer is a retail tax and yes it would be applied to the demand curve. A retail tax increases the price of a good and will reduce the quantity demanded of that product as well.
@economicsfun Hi！ I wanna ask....how can I know the demand curve is elastic or inelastic?
Thank you very much, I have a question for this if you could help me that would be great. I have a start equilibrium price of 5 and equilibrium quantity of 4, we are told that the government now levies a per unit tax, the impact of which is to reduce the supply of the good at any price by 3 units. The new equilibrium price is 5.5 and equilibrium quantity is 2. How can I estimate the consumer and producer burden? Is this OK? consumer burden (5.5-5)*2 =1 producer burden (5.5-4)*2=3, I have doubt with the producer burden. Thank you very much
when you're a mechanical engineering student and your econ elective barely makes a dent in your brain.. Thank you for your help kind sir!
+SS C You are very welcome. Hopefully you will get a chance to share and like the videos. This will help others find them.
This video makes me question why I even actually go to college
I was wondering if you knew how to do this with an equation instead of graphs.
thanks dude, great graphics and really well explained
thanx so much. u've made it simpler and fun
plz make video on excess burden of tax
hello, what will happen if the supply curve is the one who inelastic?
u slayed so hard with this video!!!!!! :)))))))
this is so weird. isnt excise supposed to affect demand first?
You've done a great job keeping this simple! Cheers!
Hi, Is there a way to calculate the tax burden on consumers and producers MATHEMATICALLY?. INSTEAD OF USING GRAPHS ??
If supply is inelastic who bears the cost of a tax?
FUCK SOMEONE FINALLY EXPLAINED IT SIMPLE
thank you for helping me not fail my ap econ exam tmrw
Marshsllian excess burden tax and in more detail
My book is showing that the demand curve shifts down by the amount of the tax instead of the supply curve shifting up. Can anyone elaborate on that?
+Richard Hebenstreit As I'm working it out and comparing, it looks like it's the same thing. If the supply curve increases by the amount of the tax or the demand curve decreases by the amount of the tax, it has the exact same effect on the tax revenue and burden of the tax on the supplier and consumer. Please correct me if I'm wrong.
Hi, I have a question like this and I can't figure out the answer, "90% of the tax the government imposed on good x was successfully passed on to consumers by the company." I think is a relatively inelastic demand, but I am not sure. Could you help me, please?
why does the buyer pays the entire tax when it is perfectly inelastic demand and perfectly elastic supply? why does the seller pays the entire tax when it is perfectly elastic demand and perfectly inelastic supply? please answer ASAP. thanks. need it so badly.
+wilma villarte Because the buyer has no choice. They have to buy it.
What graphing program is he using if any?
This is so nice, what of when the supply is elastic
Wht about supply elasticity ?
Hi sir,
wish u are doing well.
I have given a question that is how taxes on buyers and sellers affects market outcome?
If the demand is perfectly inelastic, perfectly elastic, elastic and inelastic.
Awesome video. Thanks!
very well done, you should run for president
God really bless you
God really bless you
great video, thanks man.
Is there any formula to calculate tax incidence? I can't do it with a graph because it is a tax of 4€ per unit and the eq price is 80€ and eq quantity is 80 and it's impossible to see the incidence clearly in a graph.
Would it be possible to post a lesson regarding capital investment between two countries using a graph, and demonstrating the gains and transfer of benefits? As well as a graph which demonstrates what happens when the government puts a tax on foreign investors' capital?
which editing software is used?
Why does the consumer pay the whole tax in that perfectly inelastic demand ,like why not the producer?
Because they have to buy a certain quantity no matter the price. For example say you need to drink 2 litres of water a day to survive you will have to get that two litres no matter what so if the price increases you still need to buy 2 litres.
In the other situations you can start to consume less or find alternatives as the price goes up. So for example if the price of broccoli goes up you can buy less of it and buy more cauliflower instead. This means your demand for the good is flexible and depends a lot more on the price.
Hey!! Your video is great and it has helped me grasp this concept easily. I need to write a research paper as below:
The impact of sales tax on the consumer depends on the elasticity of demand and supply. State three products in Canada that are subjected to sales tax. Who bears the burden of these taxes? Why? If necessary illustrate with diagrams.
For this question, I have chosen 3 products as gasoline, cigarettes and alcohol as there is much to research and write about them..... (continued)
What about cycles? With one inelastic demand and one elastic demand which are variable or moving along the horizontal or vertical you will get limit cycles, and how would taxes be affected? Also how is speculation modeled in this? Possibly with one isocline for actual supply and one for inflated supply. How can someone account for when the speculation price will likely crash? I don't understand why economics is not teaching these kinds of ideas because the students are being indoctrinated to unrealistic short term worldviews based on the use of incomplete math applications.
can u do it again on taxes because im lil confuse
Hi quick question, how did you know price went up from 8 to 9 in the first example? Like is there math involved in that or is it because the numbers on the graph tell you
Why always consumers have pay more and suppliers pay less when it comes to inelastic products such as gasoline and tobacco?
Because the product is inelastic, that means that for a great increase in price there will be a smaller decrease in quantity demanded, that is because cigarettes are addictive, and gasoline is a necessity. So the producers know that they can pass most of the tax to the consumers and they still will buy cigarettes or gasoline.
If I'm given the government revenue initially, how would I be able to work backwards and find the excise tax?
Lol I have an exam in half an hour.....