28 Use the following information to answer the next fifteen questions.The following graph depicts a market where a tax has been imposed. Pe was theequilibrium price before the tax was imposed, and Qe was the equilibrium quantity.After the tax, PC is the price consumers pay, and PS is the price producers receive.QT units are sold after the tax is imposed.NOTE: The areas B and Care rectangles that are divided by the supply curve ST.Include both sections of those rectangles when choosing your answers.Which area(s) represent the amount of consumer surplus lost due to the tax? Which area(s) represent the amount of consumer surplus lost due to the tax?O a) B-Cb) в -FO)AO d) A-B+FO e) A+F

Consumer surplus refers to the ads abound the price and below the demand curve.

Answered: Which area(s) represent the amount of…

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter4: Markets In Action

Section: Chapter Questions

Problem 1SQP

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The following table summarizes information about the market for principles of economics textbooks: Price Quantity Demanded per Year Quantity Supplied per Year $45 4,300 300 55 2,300 700 65 1,300 1,300 75 800 2,100 85 650 3,100 What is the market equilibrium price and quantity of textbooks? To quell outrage over tuition increases, the college places a $55 limit on the price of textbooks. How many textbooks will be sold now? While the price limit is still in effect, automated publishing increases the efficiency of textbook production. Show graphically the likely effect of this innovation on the market price and quantity.
Question 3 Suppose the demand for a product is given by Q-100-5P, where Qp is quantity per year measured in kilogram and P is the price in AUD per kilogram. The supply curve for this product is given by Qs=4P-8. Answer the following questions and provide a graph illustration. a) Determine the equilibrium price? b) Calculate the elasticity of demand and supply at the equilibrium price. c) Determine the consumer surplus and producer surplus at the equilibrium price? d) Suppose that the government imposes a floor price of A$15 and promises to buy any surplus (e.g., Q³- QD) on the market. Determine the new consumer surplus, the new producer surplus, and the government expenditure of this policy e) Instead of using the floor price, now the government imposes a A$3 tax on each kg sold, determine the market price after having this tax policy. f) Calculate the consumer surplus, producer surplus and tax revenue. g) Using the concepts of demand and supply elasticity, predict which party, the…
The demand and supply equations for a product are: Q= 300 — 6P and Q.= -40 + 6P. Determine the market equilibrium and draw graphs. Suppose that the government decides to impose a flat tax of 10% on each unit sold. Show that the price that consumers pay would be the same if the government imposed a tax of Rs. 1.70 per unit sold. Draw graphs and Also calculate the total revenue earned by sellers before and after the tax, the tax revenue raised by the government, changes in consumer and producer surplus, and deadweight loss.

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Which area(s) represent the amount of consumer surplus lost due to the tax? O a) B-C O b) B+F O)A c) A Od) A-B+F O e) A+F