Question

How am I meant to find the initial consumer surplus if I don’t know at which point on the p axis , q=0?? Help! PLEASEE

Block 3: Elasticity Activity SG3.11 Multiple choice question Here you see the football fans' demand curve d for televised football matches together with the Football Association's (FA) supply curve s for such matches. The market for televised matches clears where the two curves cross, hence when 10 matches are televised for £6 each. Suppose now that the Government introduces a tax of E4 per televised match. The figure shows that the number of televised matches falls from 10 o 6. For these 6 matches fans pay E8 but the FA earns only E4 as the difference goes into the government's coffers S2 £6 £2 10 Games per year Figure 3.3: Demand and supply of televised football matches. As a result of the tax: a. The welfare of fans increases and the welfare of the FA decreases. b. The welfare of fans decreases and the welfare of the FA increases c. Both fans and the FA lose welfare but the government raises enough tax revenues to compensate them. Both fans and the FA lose welfare and the government does not raise enough tax d. ate them e. Both fans and the FA gain welfare BVFD: read the summary and work through the Sample examination questions

Answer 1

Answer is option d)

Here u need not to find the exact values of the fall in Consumer surplus & producer surplus , so no need to find the p , when q= 0,

Though its correct that u can't find exact value of CS when this p isn't given.

Here from the graph , we can demonstrate that both cs & PS falls, government raises tax revenue .& Dead weight loss exist , thus this collected revenue can't compensate the loss of PS & CS