### Economic Analysis of Per-Unit Tax on Headphones#### Tax Impact on Consumer and Producer SurplusThe supply of headphones is characterized by a linear and upward-sloping supply curve, while the demand for headphones features a linear and downward-sloping demand curve. When the government imposes a per-unit tax on the market for headphones, several economic impacts occur.Specifically, in this market, the tax causes the following changes:- Decreases consumer surplus by $5,200.00- Decreases producer surplus by $2,800.00- Reduces the equilibrium quantity of the good by 1,200.00 headphones- Generates a deadweight loss of $2,400.00The total tax revenue generated by this tax is $ _______.#### Part 2**Question:**What is the per-unit tax in the market for headphones?**Answer:**The per-unit tax in the market for headphones must be $ _______.#### Part 3**Question:**What is the total number of headphones traded in the market with the tax in place?**Answer:**With the tax in place, the total number of headphones traded in the market is _______ headphones.---#### Explanation of Graphs and DiagramsIf any graphs or diagrams are provided, they typically illustrate the following economic concepts:1. **Supply and Demand Curves:** Showing how the supply curve shifts upwards (or leftwards) due to the tax imposition.2. **Consumer Surplus:** The area above the price line and below the demand curve before and after the tax.3. **Producer Surplus:** The area below the price line and above the supply curve before and after the tax.4. **Deadweight Loss:** The triangular area that represents the lost economic efficiency due to the tax.5. **Tax Revenue:** The rectangular area capturing the product of the number of units sold and the per-unit tax.These visual aids are crucial for understanding the interaction between supply and demand and the market effects of taxation.

Consumer Surplus: Consumer surplus is the net benefits that the consumer receives by purchasing…

The supply of headphones is linear and upward sloping, and the demand for headphones is linear and downward sloping. Suppose the government imposes a per-unit tax in the market for headphones. In this market, the tax decreases consumer surplus by $5,200.00, and it decreases producer surplus by $2,800.00. The tax decreased the equilibrium quantity of the good by 1,200.00 headphones, and it generated a deadweight loss of $2,400.00. The tax revenue generated by this tax is $ Part 2 The per-unit tax in the market for headphones must be $ Part 3 With the tax in place, the total number of headphones traded in the market is headphones.

The supply of headphones is linear and upward sloping, and the demand for headphones is linear and downward sloping. Suppose the government imposes a per-unit tax in the market for headphones. In this market, the tax decreases consumer surplus by $5,200.00, and it decreases producer surplus by $2,800.00. The tax decreased the equilibrium quantity of the good by 1,200.00 headphones, and it generated a deadweight loss of $2,400.00. The tax revenue generated by this tax is $ Part 2 The per-unit tax in the market for headphones must be $ Part 3 With the tax in place, the total number of headphones traded in the market is headphones.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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