2
answers
0
watching
150
views
28 Sep 2019
Suppose the market for cigarettes is characterized by the followinginformation:
Qd = 70 - 5P [Demand] Qs = 3P - 10 [Supply]
Suppose the government imposes a sales tax of $2 per unit.
i) Calculate the magnitude of the consumer surplus and producersurplus in the pre-tax equilibrium.
ii) Calculate the tax revenue in the post-tax equilibrium.
iii) Calculate the change in consumer surplus due to the salestax.
iv) Calculate the change in producer surplus due to the salestax.
v) Calculate the Dead-Weight-Loss due to the sales tax.
[Note: P = price per unit; Qd = thousands of units demanded; Qs =thousands of units supplied]
Suppose the market for cigarettes is characterized by the followinginformation:
Qd = 70 - 5P [Demand] Qs = 3P - 10 [Supply]
Suppose the government imposes a sales tax of $2 per unit.
i) Calculate the magnitude of the consumer surplus and producersurplus in the pre-tax equilibrium.
ii) Calculate the tax revenue in the post-tax equilibrium.
iii) Calculate the change in consumer surplus due to the salestax.
iv) Calculate the change in producer surplus due to the salestax.
v) Calculate the Dead-Weight-Loss due to the sales tax.
[Note: P = price per unit; Qd = thousands of units demanded; Qs =thousands of units supplied]
Anne Gillian DueroLv10
28 Sep 2019
Already have an account? Log in
