Microplastics have been discovered in clouds, where scientists say they could be contributing towards climate change. As such the government would like to reduce environmental pollution in South Africa. They have agreed to charge all producers of plastic bags a unit tax (that is the seller has a statutory burden). After the imposition of such a unit tax, supply curve (S) shifted from S. to S, as shown in the below figure. Which area represents the total tax paid by the consumer using below figure?

Microplastics have been discovered in clouds, where scientists say they could be contributing towards climate change. As such the government would like to reduce environmental pollution in South Africa. They have agreed to charge all producers of plastic bags a unit tax (that is the seller has a statutory burden). After the imposition of such a unit tax, supply curve (S) shifted from S. to S, as shown in the below figure. Which area represents the total tax paid by the consumer using below figure?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Hh1.
Consider the market for pork illustrated in the graph. Suppose initial demand (D¹) is Q=280-20p and supply (S¹) is Q=85 +40p and that a $2.75 tax is charged to consumers, shifting the demand curve to D². Using the original and after-tax pork demand functions and the supply function, derive the initial equilibrium price and quantity and the after-tax equilibrium price and quantity. (Enter all responses using real numbers rounded to two decimal places) The equilibrium price is initially $ per kg. (...) p, $ per kg P₁ P2 0₂. e₁ D² D¹ Q₂ Q₁ Q, Million kg of pork per year
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