The graph below shows the perfectly competitive market for porcelain fountains with no excise tax imposed. a. Suppose the government introduces an excise tax of $15 on the producers of porcelain fountains. Adjust the graph to show the effect of the tax. Then shade the appropriate areas to show the post-tax consumer surplus (CS), producer surplus (PS), and deadweight loss (DWL). To shade an area of the graph, double-click the triangle you wish to place, then move the points to the desired coordinates. Price of porcelain fountains (dollars) 100 95 90 $ 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 Demand Supi 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity of porcelain fountains ✓ CS PS DWL b. How much government revenue is created as a result of this tax?

The graph below shows the perfectly competitive market for porcelain fountains with no excise tax imposed. a. Suppose the government introduces an excise tax of $15 on the producers of porcelain fountains. Adjust the graph to show the effect of the tax. Then shade the appropriate areas to show the post-tax consumer surplus (CS), producer surplus (PS), and deadweight loss (DWL). To shade an area of the graph, double-click the triangle you wish to place, then move the points to the desired coordinates. Price of porcelain fountains (dollars) 100 95 90 $ 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 Demand Supi 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity of porcelain fountains ✓ CS PS DWL b. How much government revenue is created as a result of this tax?

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

CS 6

Economics

The graph below shows the perfectly competitive market for porcelain fountains with no excise tax imposed.
a. Suppose the government introduces an excise tax of $15 on the producers of porcelain fountains. Adjust the graph to show
the effect of the tax. Then shade the appropriate areas to show the post-tax consumer surplus (CS), producer surplus (PS), and
deadweight loss (DWL). To shade an area of the graph, double-click the triangle you wish to place, then move the points to
the desired coordinates.
Price of porcelain fountains (dollars)
100
95
90
$
85
80
75
70
65
60
55
50
45
40
35
30
25
20
15
10
5
0
Demand
Supi
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100
Quantity of porcelain fountains
✓
CS
PS
DWL
b. How much government revenue is created as a result of this tax?

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