Determine the area that represents consumer surplus before the tax.

Question

Want to see the full answer?

Answer 1

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 5, Problem 7SP

(a)

To determine

Determine the area that represents consumer surplus before the tax.

(b)

To determine

Determine the area that represents producer surplus before the tax.

(c)

To determine

Determine the area that represents consumer surplus after the tax.

(d)

To determine

Determine the area that represents producer surplus after the tax.

(e)

To determine

Determine the area that represents the tax revenue after the tax.

(f)

To determine

Determine the area that represents the deadweight loss after the tax.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

The graph accompanying this question shows a market in which the government has imposed an excise tax of $60 on producers. (a) What quantity will be sold in the market? (b) What price will consumers pay in the market? (c) By how much will consumer surplus change as a result of the tax? (d) By how much will the producer surplus change as a result of the tax? (e) How much revenue will the government collect from this excise tax? (1) Calculate the deadweight loss created by the tax. Price $120 $90 $30 0 1,000 2.000 3,000 Quantity

Suppose that the government imposes a tax on cigarettes, use the diagram below to answer the questions. D is the demand curve before tax, S is the supply curve before tax and ST is the supply curve after the tax. (e) (I) Calculate the consumer surplus after the tax. (ii) calculate the producer surplus after the tax. (iii) the tax revenue (iv) deadweight loss (v) total surplus after tax

Suppose the vertical distance between points S and R represents a tax in the market. Please answer the questions under the case of the tax. What area is the tax revenue to the government? What is the amount of the tax revenue? What area is the consumer surplus represented by? What is the amount of consumer surplus? What area is the producer surplus represented by? What is the amount of producer surplus? What area is the deadweight loss represented by? What is the amount of deadweight loss? What is the buyers’ share of tax burden? What is the sellers’ share of tax burden?

Answer 2

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 5, Problem 7SP

(a)

To determine

Determine the area that represents consumer surplus before the tax.

(b)

To determine

Determine the area that represents producer surplus before the tax.

(c)

To determine

Determine the area that represents consumer surplus after the tax.

(d)

To determine

Determine the area that represents producer surplus after the tax.

(e)

To determine

Determine the area that represents the tax revenue after the tax.

(f)

To determine

Determine the area that represents the deadweight loss after the tax.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 5, Problem 7SP

(a)

To determine

Determine the area that represents consumer surplus before the tax.

(b)

To determine

Determine the area that represents producer surplus before the tax.

(c)

To determine

Determine the area that represents consumer surplus after the tax.

(d)

To determine

Determine the area that represents producer surplus after the tax.

(e)

To determine

Determine the area that represents the tax revenue after the tax.

(f)

To determine

Determine the area that represents the deadweight loss after the tax.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 5, Problem 7SP

(a)

To determine

Determine the area that represents consumer surplus before the tax.

(b)

To determine

Determine the area that represents producer surplus before the tax.

(c)

To determine

Determine the area that represents consumer surplus after the tax.

(d)

To determine

Determine the area that represents producer surplus after the tax.

(e)

To determine

Determine the area that represents the tax revenue after the tax.

(f)

To determine

Determine the area that represents the deadweight loss after the tax.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 5, Problem 7SP

(a)

To determine

Determine the area that represents consumer surplus before the tax.

(b)

To determine

Determine the area that represents producer surplus before the tax.

(c)

To determine

Determine the area that represents consumer surplus after the tax.

(d)

To determine

Determine the area that represents producer surplus after the tax.

(e)

To determine

Determine the area that represents the tax revenue after the tax.

(f)

To determine

Determine the area that represents the deadweight loss after the tax.

Answer 6

Chapter 5, Problem 7SP

(a)

To determine

Determine the area that represents consumer surplus before the tax.

Answer 7

Chapter 5, Problem 7SP

(a)

To determine

Determine the area that represents consumer surplus before the tax.

Answer 8

(b)

To determine

Determine the area that represents producer surplus before the tax.

Answer 9

(b)

To determine

Determine the area that represents producer surplus before the tax.

Answer 10

(c)

To determine

Determine the area that represents consumer surplus after the tax.

Answer 11

(c)

To determine

Determine the area that represents consumer surplus after the tax.

Answer 12

(d)

To determine

Determine the area that represents producer surplus after the tax.

Answer 13

(d)

To determine

Determine the area that represents producer surplus after the tax.

Answer 14

(e)

To determine

Determine the area that represents the tax revenue after the tax.

Answer 15

(e)

To determine

Determine the area that represents the tax revenue after the tax.

Answer 16

(f)

To determine

Determine the area that represents the deadweight loss after the tax.

Answer 17

(f)

To determine

Determine the area that represents the deadweight loss after the tax.

Answer 18

Expert Solution & Answer

Answer 19

Expert Solution & Answer

Answer 20

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 21

Ch. 5 - Prob. 1QR Ch. 5 - Prob. 2QR Ch. 5 - Prob. 3QR Ch. 5 - Prob. 4QR Ch. 5 - Prob. 5QR Ch. 5 - Prob. 6QR Ch. 5 - Prob. 7QR Ch. 5 - Prob. 1SP Ch. 5 - Prob. 2SP Ch. 5 - Prob. 3SP

Determine the area that represents consumer surplus before the tax.

Solution Summary: The author explains that consumer surplus before the tax represents the area below the demand curve and above the price level, and producer surplus after tax.

Determine the area that represents consumer surplus before the tax.

Determine the area that represents producer surplus before the tax.

Determine the area that represents consumer surplus after the tax.

Determine the area that represents producer surplus after the tax.

Determine the area that represents the tax revenue after the tax.

Determine the area that represents the deadweight loss after the tax.

Want to see the full answer?

Chapter 5 Solutions