Consider the market for commercial fans. The following graph shows the demand and supply for commercial fans before the government imposes any taxes.First, use the black point (plus symbol) to indicate the equilibrium price and quantity of commercial fans 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.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. Before TaxAfter Tax(Dollars)(Dollars) Before Tax (Dollars) After Tax (Dollars)Consumer Surplus ______ _________Producer Surplus ______ _________Tax Revenue 0 _____ Deadweight Loss 0 ______ 11Homework (Ch 08)First, use the tan quadrilateral (dash symbals) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade thearea representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producersurplus after the tax. Finally, use the black point (plus symbol) to shade the area representing deadweight loss.After TaxDemand5045Tax Revenue4030Consumer Surplus2520Tax WedgeProducer Surplus15Supply10Deadweight Loss5.50100150200250300350400450500QUANTITY (Fans)Complete the following table by using the previous graphs to determine the values of consumer and producer surplus before the tax, and consumersurplus, 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.PRICE (Dollars per fan) work (Ch 08)Kes.irst, use the black point (plus symbol) to indicate the equilibrium price and quantity of commercial fans in the absence of a tax. Then use the greenoint (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamondsymbol) to shade the area representing total producer surplus (PS) at the equilibrium price.Before TaxDemand5045Equilibrium403530Consumer Surplus25Producer SurplusSupply1050250. 300 350100150200400450500QUANTITY (Fans)Suppose the government imposes an excise tax on commercial fans. The black line on the following graph shows the tax wedge created by a tax of$20 per fan.PRICE (Dollars per fan)

Deadweight loss is the decrease in total surplus. Imposition of tax creates deadweight loss as less…

Answered: Consider the market for commercial…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the market for commercial fans. The following graph shows the demand and supply for commercial fans before the government imposes any taxes.

First, use the black point (plus symbol) to indicate the equilibrium price and quantity of commercial fans 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.

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.

	Before Tax	After Tax
(Dollars)	(Dollars)

Before Tax (Dollars) After Tax (Dollars)

Consumer Surplus ______ _________

Producer Surplus ______ _________

Tax Revenue 0 _____

Deadweight Loss 0 ______

11
Homework (Ch 08)
First, use the tan quadrilateral (dash symbals) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade the
area representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producer
surplus after the tax. Finally, use the black point (plus symbol) to shade the area representing deadweight loss.
After Tax
Demand
50
45
Tax Revenue
40
30
Consumer Surplus
25
20
Tax Wedge
Producer Surplus
15
Supply
10
Deadweight Loss
5.
50
100
150
200
250
300
350
400
450
500
QUANTITY (Fans)
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.
PRICE (Dollars per fan)

work (Ch 08)
Kes.
irst, use the black point (plus symbol) to indicate the equilibrium price and quantity of commercial fans in the absence of a tax. Then use the green
oint (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.
Before Tax
Demand
50
45
Equilibrium
40
35
30
Consumer Surplus
25
Producer Surplus
Supply
10
50
250. 300 350
100
150
200
400
450
500
QUANTITY (Fans)
Suppose the government imposes an excise tax on commercial fans. The black line on the following graph shows the tax wedge created by a tax of
$20 per fan.
PRICE (Dollars per fan)

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