Taxes To Affect The Incentives

As of 2009, many state governments were experiencing fiscal problems, and tax revenues were falling short of planned expenditures. What factors can influence state revenue collections and expenditures Why must state governments cut spending or increase taxes when revenues fall short of expenditures Give examples of the types of taxes used by state governments. Your response should be at least 200 words in length. You are required to use at least your textbook as source material for your response. All sources used, including the textbook, must be referenced paraphrased and quoted material must have accompanying citations. The wine industry is currently composed of many firms, and wine is sold in a perfectly competitive market. The wine industry produces the efficient annual output of wine, which is 100,000 bottles per year. The market equilibrium price is 5 per bottle. a. Draw the market demand and supply of wine, and label the curves to show why the market output is the efficient output. b. Suppose that the wine industry is consolidated into one large monopoly firm. As a result of the monopolization of the industry, the price of wine increase to 7 per bottle, and the annual quantity demanded falls to 75,000