Consider a market with a linear relatively Inelastic demand curve and a relatively Elastic linear Supply Curve draw such a market. Denote the Market Outcome as P* and Q* Suppose a tax is imposed on this market of size t. Draw and label this tax. Label the new output and price as Qt and Pt. What happens to consumer and producer surplus? Describe and then specifically shade (lightly with a pencil, highlighter, outline with a thick box boarder) in the NEW level of CONSUMER Surplus only on your graph.
Consider a market with a linear relatively Inelastic demand curve and a relatively Elastic linear Supply Curve draw such a market. Denote the Market Outcome as P* and Q* Suppose a tax is imposed on this market of size t. Draw and label this tax. Label the new output and price as Qt and Pt. What happens to consumer and producer surplus? Describe and then specifically shade (lightly with a pencil, highlighter, outline with a thick box boarder) in the NEW level of CONSUMER Surplus only on your graph.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter7: Consumers, Producers, And The Efficiency Of Markets
Section: Chapter Questions
Problem 7PA
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