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Price (dollars) $6.00 S. tax Tools $5.50 $5.00 DWL $4.50 $4.00 P. Buyer $3.50 DWL $3.00 Seller $2.50 $2.00 $1.50 $1.00 D $0.50 2 4 6 8 10 12 14 16 18 20 Quantity (thousands of gallons)

Price (dollars) $6.00 S. tax Tools $5.50 $5.00 DWL $4.50 $4.00 P. Buyer $3.50 DWL $3.00 Seller $2.50 $2.00 $1.50 $1.00 D $0.50 2 4 6 8 10 12 14 16 18 20 Quantity (thousands of gallons)

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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Price (dollars) $6.00 Tools tax $5.50 $5.00 DWL $4.50 $4.00 P. Buyer $3.50 DWL $3.00 Seller $2.50 $2.00 $1.50 $1.00 D $0.50 2 4 6 8 10 12 14 16 18 20 Quantity (thousands of gallons) 10. This generates a a. Before the tax is imposed, the equilibrium price is $ surplus of $ and the equilibrium quantity is Next, consider a $1.00 excise tax on producers for each pound of sugar sold. The graphillustrates the demand and supply sugar both before and after the tax is imposed. Answer the questions below based on the market for sugar with the $1.00 b. The consumer surplus generated after the imposition of the tax is $ c. The producer surplus generated after the imposition of the tax is $ d. The total revenue generated from the tax is $| e. The economic surplus generated after the tax is $ f. The deadweight loss generated by the imposition of the tax is $ Shade in this area on the graph.
Transcribed Image Text:Price (dollars) $6.00 Tools tax $5.50 $5.00 DWL $4.50 $4.00 P. Buyer $3.50 DWL $3.00 Seller $2.50 $2.00 $1.50 $1.00 D $0.50 2 4 6 8 10 12 14 16 18 20 Quantity (thousands of gallons) 10. This generates a a. Before the tax is imposed, the equilibrium price is $ surplus of $ and the equilibrium quantity is Next, consider a $1.00 excise tax on producers for each pound of sugar sold. The graphillustrates the demand and supply sugar both before and after the tax is imposed. Answer the questions below based on the market for sugar with the $1.00 b. The consumer surplus generated after the imposition of the tax is $ c. The producer surplus generated after the imposition of the tax is $ d. The total revenue generated from the tax is $| e. The economic surplus generated after the tax is $ f. The deadweight loss generated by the imposition of the tax is $ Shade in this area on the graph.
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