Please assist with the following questions1. Calculate the (i) consumer surplus BREFORE THE TAX (ii) producers surplus BEFORE THE TAX2. For the market of cigarettes WITH THE TAX please indicate (i) the tax (ii) price paid by consumers (iii) price received by producers (iv) Quantitiy of cigarettes sold thank you Question 5Suppose that the government imposes a tax on cigarettes. Use the diagram below toanswer the questions. D is the demand curve before tax, S is the supply curve before taxand St is the supply curve after the tax.PriceST1812108710 12Qua(a) For the market for cigarettes without the tax. Indicate:Created by Paint SPrice paid by consumersPrice paid by producersQuantity of cigarettes soldBuyer's reservation priceSeller's reservation price

1. Consumer surplus before tax = 12×18-10×12=48Producer surplus before tax = 12×10-3×12=42

Please assist with the following questions 1. Calculate the (i) consumer surplus BREFORE THE TAX (ii) producers surplus BEFORE THE TAX 2. For the market of cigarettes WITH THE TAX please indicate (i) the tax (ii) price paid by consumers (iii) price received by producers (iv) Quantitiy of cigarettes sold

Please assist with the following questions 1. Calculate the (i) consumer surplus BREFORE THE TAX (ii) producers surplus BEFORE THE TAX 2. For the market of cigarettes WITH THE TAX please indicate (i) the tax (ii) price paid by consumers (iii) price received by producers (iv) Quantitiy of cigarettes sold

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Please assist with the following questions

1. Calculate the

(i) consumer surplus BREFORE THE TAX

(ii) producers surplus BEFORE THE TAX

2. For the market of cigarettes WITH THE TAX please indicate

(i) the tax

(ii) price paid by consumers

(iii) price received by producers

(iv) Quantitiy of cigarettes sold

thank you

Question 5
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 St 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:
Created by Paint S
Price paid by consumers
Price paid by producers
Quantity of cigarettes sold
Buyer's reservation price
Seller's reservation price

Consumer’s gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price and up to the equilibrium quantity. Consumer surplus is represented by area A.

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