The graph shows the demand and supply curves for shirts in the state of Awoi. The state decides to impose a $14 sales tax on the sellers. You are asked to figure out the effect of the tax. Based on the information provided, answer the questions below. Make sure you show your work. Price (S/shirt) Supply + tax Supply Demand 10 15 20 25 30 35 Quantity (shirts per day) Before the tax is imposed: 1. What area represents the consumer surplus? Calculate the consumer surplus. 2. What area represents the producer surplus? Calculate the producer surplus. 3. Calculate the total surplus.
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Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good and the actual price they pay. In this case, the maximum price a consumer is willing to pay is represented by the demand curve. Consumer surplus = 0.5 * (130 - Show more…
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First, use the black point (plus symbol) to indicate the equilibrium price and quantity of mountain bikes in the absence of a tax. Then, use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing total producer surplus (PS) at the equilibrium price. Before Tax Demand Equilibrium Consumer Surplus Producer Surplus Supply QUANTITY (Bikes) tax of $60
Azat N.
According to the figure above, producer surplus in the market is: $15,000. $30,000. $40,000. $12,500. Suppose the government imposes a $0.55 per-unit tax in this market. After tax, consumers are paying (including tax) $8.25 per unit and the market output is 4,750 units. How much deadweight loss does the tax cause? $137.50 $68.75 $47.50 $0.55 After tax, what is consumer surplus in the market (rounded to the nearest whole number)? $12,431 $12,500 $13,538 $11,281 P $13 $8 $2 D 5,000 Q/t
Crystal W.
Use the following marginal benefit-marginal cost graph to calculate the consumer and producer surplus.
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