1. Use the following graph shown to fill in the table that follows Consumer surplus Producer surplus Tax revenue Total surplus P4 P3 P2 P1 Price A B D F Q2 (5 Q1 WITHOUT TAX Supply Demand Quantity WITH TAX CHANGE

1. Use the following graph shown to fill in the table that follows Consumer surplus Producer surplus Tax revenue Total surplus P4 P3 P2 P1 Price A B D F Q2 (5 Q1 WITHOUT TAX Supply Demand Quantity WITH TAX CHANGE

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter17: Taxation And Resource Allocation

Section: Chapter Questions

Problem 1DQ

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1. Use the following graph shown to fill in the table that follows
Consumer surplus
Producer surplus
Tax revenue
Total surplus
P4
P3
P2
P1
Price
A
B
D
F
Q2
Q1
WITHOUT TAX
Supply
Demand
Quantity
WITH TAX
CHANGE

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Step 1: Define equilibrium.

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Step 2: Compare the after tax and before tax equilibrium.

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