Question

Suppose the current equilibrium price of cheese pizzas is ​$11.00​, and 10 million pizzas are sold per month. After the federal government imposes a ​$4.00 per pizza​ tax, the equilibrium price of pizzas rises to ​$13.00​, and the equilibrium quantity falls to 8 million. This situation is illustrated in the graph.   

Compare the economic surplus LOADING... in this market when there is no tax to when there is a tax on pizza.  

​1.) Use the triangle drawing tool to shade in the change in economic surplus as a result of the tax. Properly label this shaded area indicating whether surplus has increased​ (new economic​ surplus) or decreased ​(deadweight loss LOADING...​).

​2.) Use the rectangle drawing tool to shade in new government revenue as a result of the tax. Properly label this shaded area.

Carefully follow the instructions​ above, and only draw the required objects.

Suppose the current equilbrium price of cheese pizzas is $11.00, and 10 million pizzas are sold per month. After the federal government imposes a $4.00 per pizza tax, the equilibrium price of pizzas rises to $13.00, and the equilibrium quantity falls to 8 milion. This situation is illustrated in the graph. Compare the economic surplus in this market when there is no tax to when there is a tax on pizza. 1.) Use the triangle drawing tool to shade in the change in economic surplus as a result of the tax. Properly label this shaded area indicating whether surplus has increased (new economic surplus) or decreased (deadweight loss) 2.) Use the rectangle drawing tool to shade in new government revenue as a result of the tax. Propertly label this shaded area. Carefully follow the instructions above, and only draw the required objects

Answer 1

Since, I cannot access the interactive tool so I am uploading a picture of the same by indicating the required values. Kindly refer the attached picture

null

I have labelled the shapes such as A, B, C and D.

A+ B = Government Revenue

A + C = loss in consumer surplus due to tax

B + D = Loss in producer surplus due to tax

C + D = Deadweight loss

Please contact if having any query thank you.