So, note that in the following graph the tax revenue is the area which is between the new and old supply curve (as the shift is equal to the taxes) over the quantity purchased. Revenu is shaded in vertical lines.
The deadweight loss, on the other hand, is the area or the surplus which is lost due to the imposition of taxes. Here it is equal to the area which is a triangle in shape as this is lost due to an increase in taxes. It is shaded by slanted lines.
Note that teh area of parallelogram is base*height while teh area of traingle is 1/2*base*height.
The revenue area for graph 1 is 60*100 or 6000 and graph 2 is 250*60 or 15000.
The deadweight loss for graph 1 and 2 are 1/2*60*250 or 7500 and 1/2*60*100 or 3000 respectively.
To earn more revenue, the government must tax bus passes, as less elastic demand generates more tax revenue and less deadweight loss. Less elastic demand means there will be a lesser change in the demand for a good with the change in its price.
The government is considering levying a tax of $60 per unit on suppliers of either concert...
The government is considering levying a tax of $60 per unit on suppliers of either concert tickets or bus passes. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for concert tickets is shown by (on the first graph), and the demand for bus passes is shown by (on the second graph).Suppose the government taxes concert tickets. The following graph shows the annual supply and demand for this...
in this case it should tax (concert tickets, bus passes) With a relatively (less, more) 3. Relationship between tax revenues, deadweight loss, and demand elasticity The government is considering levying a tax of $60 per unit on suppliers of either concert tickets or bus passes. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for concert tickets is shown by Dc (on the first graph), and...
Homework (Ch 08) 3. Relationship between tax revenues, deadweight loss, and demandelasticity The government is considering levying a tax of $60 per unit on suppliers of either concert tickets or bus passes. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for concert tickets is shown by Dc (on the first graph), and the demand for bus passes is shown by Ds (on the second graph)....
3. Relationship between tax revenues, deadweight loss, and demandelasticity The government is considering levying a tax of $60 per unit on suppliers of either concert tickets or bus passes. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for concert tickets is shown by Dc (on the first graph), and the demand for bus passes is shown by DB (on the second graph). Suppose the government...
3. Relationship between tax revenues, deadweight loss, and demand elasticityThe government is considering levying a tax of $60 per unit on suppliers of either concert tickets or bus passes. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for concert tickets is shown by DC (on the first graph), and the demand for bus passes is shown by DB (on the second graph).Suppose the government taxes...
3. Relationship between tax revenues, deadweight loss, and demandelasticity The government is considering levying a tax of $100 per unit on suppliers of either leather jackets or smartphones. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for leather jackets is shown by DL (on the first graph), and the demand for smartphones is shown by Ds (on the second graph). Suppose the government taxes leather jackets. The...
levying a tax of $100 per unit on The qovernment is consid suppliers of either leather jackets ór smartphones. The supply curve for each of these two goods is identical, as each of the following graphs. The demand for leather jackets is shown by Di (on the first graph), and the demand for smartphones is shown by Ds (on the second graph) Suppose the government taxes leather jackets. The followin graph shows the annual supply and demand for this good...
The government is considering levying a tax of $50 per unit on suppliers of either concert tickets or bus passes. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for concert tickets is shown by (on the first graph), and the demand for bus passes is shown by (on the second graph).
The government is considering levying a tax of $80 per unit on suppliers of either leather jackets or smartphones. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for leather jackets is shown by DL (on the first graph), and the demand for smartphones is shown by Ds (on the second graph). Suppose the government taxes leather jackets. The following graph shows the annual supply and demand...
Consider the market for luxury yachts depicted on the following graph. Determine the equilibrium price and quantity of luxury yachts in the absence of a tax. Using the green triangle (triangle symbols), shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple triangle (diamond symbols) to shade the area on the following graph representing total producer surplus (PS) at the equilibrium price. PRICE (Thousands of dollars per yacht! Supply 0 10 20 Demand 30...