Suppose that the government imposes a tax on cigarettes. Use the diagram below to answer the questions. D is the demand curve before tax, S is the supply curve before tax and ST is the supply curve after the tax. Price 18 12 10 8 7. D 10 12 Qua (a) For the market for cigarettes without the tax. Indicate: (i) Price paid by consumers (ii) Price paid by producers (iii) Quantity of cigarettes sold 3.
Suppose that the government imposes a tax on cigarettes, use the diagram below to answer the questions. D is the demand curve before tax, S is the supply curve before tax and ST is the supply curve after the tax.
For the market without the tax. Indicate
(I)
(Ii) price paid by producers
(iii) quantity of cigarettes sold
(iv) buyer's reservation price
(v) sellers reservation price
(b) Calculate the
(c) calculate the
(d) For the market for cigarettes with the tax, calculate
(I) the tax
(ii) price paid by consumers
(iii) price recieved by producers
(iv) quantity of cigarettes sold
(e) (I) Calculate the consumer surplus after the tax.
(ii) calculate the producer surplus after the tax.
(iii) the tax revenue
(iv)
(v) total surplus after tax
Trending now
This is a popular solution!
Step by step
Solved in 2 steps