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Given the following information: QD= 240-5P QS= P Where QD is the quantity demand, QS is the quantity supplied and P is the price. Suppose the government decides to impose tax of $12 per unit on sellers in the market. Determine:      Consumer surplus after tax _____________

Given the following information: QD= 240-5P QS= P Where QD is the quantity demand, QS is the quantity supplied and P is the price. Suppose the government decides to impose tax of $12 per unit on sellers in the market. Determine:      Consumer surplus after tax _____________

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Given the following information:

QD= 240-5P

QS= P

Where QD is the quantity demand, QS is the quantity supplied and P is the price. Suppose the government decides to impose tax of $12 per unit on sellers in the market.

Determine:      Consumer surplus after tax _____________.

 

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With the introduction of tax price paid by consumer increases leading to decrease in consumer surplus. 

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