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(d) For the market for cigarettes with the tax indicate Price received by producers Quantity of cigarettes sold Price paid by consumers The tax (e) Calculate the: consumer surplus after the tax producer surplus after the tax Tax revenue Deadweight loss Total surplus after tax

(d) For the market for cigarettes with the tax indicate Price received by producers Quantity of cigarettes sold Price paid by consumers The tax (e) Calculate the: consumer surplus after the tax producer surplus after the tax Tax revenue Deadweight loss Total surplus after tax

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please answer questions d and e. Thank you.

Suppose that the government imposes a tax on cigarettes. Use the diagram below to answer the questions. D is the demand curve before tax, S is the supply curve before tax and S- is the supply curve after the tax. Price ST 18 12 10 8 7 10 12 Qua (a) For the market for cigarettes without the tax, indicate: Seller's reservation price Price paid by consumers Quantity of cigarettes sold Buyer's reservation price Price paid by producers (b) Calculate the consumer surplus before tax (c) Calculate the producer surplus before tax (d) For the market for cigarettes with the tax indicate Price received by producers Quantity of cigarettes sold Price paid by consumers The tax (e) Calculate the: consumer surplus after the tax producer surplus after the tax Tax revenue Deadweight loss Total surplus after tax
Transcribed Image Text:Suppose that the government imposes a tax on cigarettes. Use the diagram below to answer the questions. D is the demand curve before tax, S is the supply curve before tax and S- is the supply curve after the tax. Price ST 18 12 10 8 7 10 12 Qua (a) For the market for cigarettes without the tax, indicate: Seller's reservation price Price paid by consumers Quantity of cigarettes sold Buyer's reservation price Price paid by producers (b) Calculate the consumer surplus before tax (c) Calculate the producer surplus before tax (d) For the market for cigarettes with the tax indicate Price received by producers Quantity of cigarettes sold Price paid by consumers The tax (e) Calculate the: consumer surplus after the tax producer surplus after the tax Tax revenue Deadweight loss Total surplus after tax
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