Answer:
The tax on hearing aid is $120 per unit.
Explanation:
The supply curve for hearing aid is a typical upward-sloping straight line, and the demand curve is a typical downward-sloping straight line.
A tax is imposed on each unit of hearing aid.
As a result of the tax, the equilibrium quantity of hearing aids decreases from 10,000 to 9,000.
The deadweight loss of the tax is $60,000.
Deadweight loss = [tex]\frac{1}{2}\ (Q1 - Q2)\ \times\ Tax[/tex]
$60,000 = [tex]\frac{1}{2}\ (10,000 - 9,000)\ \times\ Tax[/tex]
$60,000 = [tex]500\ \times\ Tax[/tex]
Tax = [tex]\frac{60,000}{500}[/tex]
Tax = $120
