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 just decided to impose a tax on this market; the grey points (star symbol) indicates the after-tax scenario.

omework (Ch 08) Due Today at 11:59 PM CST The following graph represents the demand and supply for an imaginary good called a pinckney. The black point (plus symbol) Indicates the pre-tax equllibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) Indicate the after-tax scenario. Demand Supply 30.00 22.50 QUANTITY (Pinckneys)

Answer 1

Question 1). Answer :-

Result	Value
Price consumers pay after tax	$ 37.50
Per unit tax	$ 15 (37.50 - 22.50)
Equilibrium quantity after tax	2.50 (Decrease in equilibrium quantity from 4 to 2.5)

Question 2). Answer :-

Concept	Graphs
a). Tax revenue after the tax is imposed.	B and D.
b). Producer surplus before the tax is imposed.	D, E and F.
c). Consumer surplus after the tax is imposed.	A.