Ronald's monthly demand for Cap Rock Chardonnay is given by where I is Ronald's monthly income,T is his tax expense and P is the price of Cap Rock Chardonnay.Suppose the Price of Cap Rock Chardonnay is $10,Ronald's monthly income is $15,000,and his tax expense is $5,000.Calculate how much Ronald changes his Chardonnay consumption if his taxes are increased by 20%.Also,calculate Ronald's Consumer Surplus from consuming Cap Rock Chardonnay before and after the increase in taxes.

Question

Ronald's monthly demand for Cap Rock Chardonnay is given by  where I is Ronald's monthly income,T is his tax expense and P is the price of Cap Rock Chardonnay.Suppose the Price of Cap Rock Chardonnay is $10,Ronald's monthly income is $15,000,and his tax expense is $5,000.Calculate how much Ronald changes his Chardonnay consumption if his taxes are increased by 20%.Also,calculate Ronald's Consumer Surplus from consuming Cap Rock Chardonnay before and after the increase in taxes.

Quizplus · Accepted Answer

The Answer of Ronald's monthly demand for Cap Rock Chardonnay is given by  where I is Ronald's monthly income,T is his tax expense and P is the price of Cap Rock Chardonnay.Suppose the Price of Cap Rock Chardonnay is $10,Ronald's monthly income is $15,000,and his tax expense is $5,000.Calculate how much Ronald changes his Chardonnay consumption if his taxes are increased by 20%.Also,calculate Ronald's Consumer Surplus from consuming Cap Rock Chardonnay before and after the increase in taxes.

Ronald's Monthly Demand for Cap Rock Chardonnay Is Given by