100 90 80 PRICE (Dollars per handbag) 8 70 60 Tax Wedge 50 40 20 10 Demand D Supply After Tax 0 160 320 480 640 800 960 1120 1280 1440 1600 QUANTITY (Handbags) Consumer Surplus Producer Surplus Tax Revenue Deadweight Loss Tax Revenue 0 0 Consumer Surplus Producer Surplus Complete the following table by using the previous graphs to determine the values of consumer and producer surplus before the tax, and consume surplus, producer surplus, tax revenue, and deadweight loss after the tax. Note: You can determine the areas of different portions of the graph by selecting the relevant area. Before Tax After Tax (Dollars) (Dollars) Deadweight Loss
100 90 80 PRICE (Dollars per handbag) 8 70 60 Tax Wedge 50 40 20 10 Demand D Supply After Tax 0 160 320 480 640 800 960 1120 1280 1440 1600 QUANTITY (Handbags) Consumer Surplus Producer Surplus Tax Revenue Deadweight Loss Tax Revenue 0 0 Consumer Surplus Producer Surplus Complete the following table by using the previous graphs to determine the values of consumer and producer surplus before the tax, and consume surplus, producer surplus, tax revenue, and deadweight loss after the tax. Note: You can determine the areas of different portions of the graph by selecting the relevant area. Before Tax After Tax (Dollars) (Dollars) Deadweight Loss
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![PRICE (Dollars per handbag)
100
90
80
70
60 Tax Wedge
50
40
30
20
10
Demand
0
Supply
0 160 320 480 640 800
After Tax
Consumer Surplus
Producer Surplus
Tax Revenue
Deadweight Loss
960
QUANTITY (Handbags)
1120 1280 1440 1600
Before Tax
(Dollars)
0
0
Tax Revenue
A
Complete the following table by using the previous graphs to determine the values of consumer and producer surplus before the tax, and consumer
surplus, producer surplus, tax revenue, and deadweight loss after the tax.
Note: You can determine the areas of different portions of the graph by selecting the relevant area.
After Tax
(Dollars)
Consumer Surplus
Producer Surplus
Deadweight Loss](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9a6b39e1-0218-4770-8cd5-1bba53077e12%2F15215d08-1612-46b4-b6b7-533eadcaac05%2Foee11b_processed.png&w=3840&q=75)
Transcribed Image Text:PRICE (Dollars per handbag)
100
90
80
70
60 Tax Wedge
50
40
30
20
10
Demand
0
Supply
0 160 320 480 640 800
After Tax
Consumer Surplus
Producer Surplus
Tax Revenue
Deadweight Loss
960
QUANTITY (Handbags)
1120 1280 1440 1600
Before Tax
(Dollars)
0
0
Tax Revenue
A
Complete the following table by using the previous graphs to determine the values of consumer and producer surplus before the tax, and consumer
surplus, producer surplus, tax revenue, and deadweight loss after the tax.
Note: You can determine the areas of different portions of the graph by selecting the relevant area.
After Tax
(Dollars)
Consumer Surplus
Producer Surplus
Deadweight Loss
![Consider the market for designer handbags. The following graph shows the demand and supply for designer handbags before the government imposes
any taxes.
First, use the black point (plus symbol) to indicate the equilibrium price and quantity of designer handbags in the absence of a tax. Then use the green
point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond
symbol) to shade the area representing total producer surplus (PS) at the equilibrium price.
PRICE (Dollars per handbag)
100
90
80
70
60
50
40
30
20
10
0
0
Demand
Supply
Before Tax
160 3:20 480 640 800 960 1120 1280 1440 1600
QUANTITY (Handbags)
+
Equilibrium
Consumer Surplus
Producer Surplus](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9a6b39e1-0218-4770-8cd5-1bba53077e12%2F15215d08-1612-46b4-b6b7-533eadcaac05%2Frerufko_processed.png&w=3840&q=75)
Transcribed Image Text:Consider the market for designer handbags. The following graph shows the demand and supply for designer handbags before the government imposes
any taxes.
First, use the black point (plus symbol) to indicate the equilibrium price and quantity of designer handbags in the absence of a tax. Then use the green
point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond
symbol) to shade the area representing total producer surplus (PS) at the equilibrium price.
PRICE (Dollars per handbag)
100
90
80
70
60
50
40
30
20
10
0
0
Demand
Supply
Before Tax
160 3:20 480 640 800 960 1120 1280 1440 1600
QUANTITY (Handbags)
+
Equilibrium
Consumer Surplus
Producer Surplus
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