Consider the market for mountain bikes. The following graph shows the demand and supply for mountain...

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Consider the market for mountain bikes. The following graph shows the demand and supply for mountain bikes before the government imposes any taxes. First, use the black point (plus symbol) to indicate the equilbrium price and quantity of mountain bikes in the absence of a tex. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilbrium price. Next, use the purple point (dlamond symbol) to shade the area representing total producer surplus (PS) at the equilibrium price, Before Tax 150 135 Demand 120 105 Consumer Surplus 75 60 45 30 15 Producer Surplus Supply 0 70 140 210 200 350 420 400 00 630 700 QUANTITY (Bikes)

First, area representing total consumer surplus surplus after the tax. Finally, use the black point (plus symbol) to shade the area representing dea symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade the after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producer After Tax 150 T 135 Demand Tax Revenue 120 105 90 Tax Wedge 75 Consumer Surplus Producer Surplus 45 Supply 30 Deadweight Loss 15 0 70 140 210 280 350 420 400 56063700 QUANTITY (Bikes)

Complete the following table by using the previous graphs to determine the values of surplus, producer surplus, tax revenue, and deadweight loss after the tax Note: You can determine the areas of different portions of the graph by selecting the relevant area. consumer and producer surplus before the tax, and consumer Before Tax After Tax (Dollars) (Dollars) Consumer Surplus Producer Surplus Tax Revenue Deadweight Loss

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Answer 1

Answer #1

Tau Yeen 70% Supy S) 120A C. Revenue Loss cDwi) 38oQuanti 140 2 as Poduun 12,600 ISo ニ yor (05-45) 140 X60 $ | 8,400 Deadis Loss ^ * 6o x 140 = 30x140 =予14,200

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