Question

The following graph represents the demand and supply for an imaginary good called a pinckney. The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario.

本 (Aauyoud Jad sieloq) 30-yd

Complete the following table, given the information presented on the graph.

Result	Value
Per-unit tax rate
Equilibrium quantity before tax
Price consumers pay after tax

In the following table, indicate which of the previous graph?s areas corresponds to each concept. Check all that apply.

Concept	A	B	C	D	E	F
Consumer surplus after the tax is imposed
Producer surplus before the tax is imposed
Tax revenue after the tax is imposed

Answer 1

The following graph represents the demand and supply for an imaginary go Pinckney. The plus-point indicates the pre-tax equilibrium od called a Suppose the govemment has just decided to impose a tax on this market; the star symbols indicate the after-tax scenario Supply 28.00 20.00--- QUANTITY (Pinckneys) Initially the equilibrium price is S20 and equilibrium quantity is S20 Consumer surplus before-tax is A+B+C (area below the demand curve and above the price line) Producer surplus before-tax is D+E+F (area above the supply curve and below the price line) After the imposition of tax, the equilibrium quantity is 2 units Price paid by consumer is S28 per unit and price received by seller is S12 per unit Thus the amount of tax is S16 per unit, that is, S28-S12 Consumer surplus after-tax is A Producer surplus after-tax is F Tax revenue is B+D Given the information presented on the graph Result Value S16 Per-unit tax rate Equilibrium quantity before tax Price consumers pay after tax $28 Concept Consumer surplus after the tax is imposed Producer surplus before the tax is imposed Tax revenue after the tax is imposed