Question

What is the size of the tax?

What is the equilibrium quantity before the tax?

What is the equilibrium quantity with the tax?

What is the price consumers pay before taxes?

What is the price consumers pay with the tax?

What is the price sellers receive before taxes?

What is the price sellers receive with the tax?

For the questions below, enter only the letters that are part of the answer, with no spaces or commas, in alphabetical order. (Example: enter something like XYZor AZ, do not enter "X Y Z" or "A,Z")

What is the deadweight loss of the tax?
What is the government tax revenue?

What is consumer surplus before the tax?

What is consumer surplus with the tax?

What is producer surplus before the tax?

What is producer surplus with the tax?

Answer 1

(a) Size of tax = P2 - P0

(b) Quantity before tax = Q1

(c) Quantity with tax = Q0

(d) Price consumers pay before tax = P1

(e) Price consumers pay with tax = P2

(f) Price sellers receive before tax = P1

(g) Price sellers receive with tax = P0

(h) Deadweight loss of tax = GC

(i) Tax revenue = FB

(j) Consumer surplus before tax = Area between demand curve and equilibrium price = FGH

(k) Consumer surplus with tax = H

(l) Producer surplus before tax = Area between supply curve and equilibrium price = ABC

(m) Producer surplus with tax = A