The market demand function for corn is Q = 30 - 2P. The market supply function is QS = 5P-2.5, both measured in billions of bushels per year. Suppose the government imposes a $8.10 tax per bushel. What will be the effects on aggregate surplus, consumer surplus, and producer surplus? What will be the deadweight loss created by the tax? Instructions: Round your quantities to the nearest whole number. Round prices, surpluses and deadweight losses to 2 decimal places. a. What are the initial equilibrium effects? Complete the table below. Initial equilibrium price Initial equilibrium quantity Initial equilibrium consumer surplus Initial equilibrium producer surplus After-tax equilibrium price After-tax equilibrium quantity After-tax equilibrium consumer surplus After-tax equilibrium producer surplus $ Government revenue After-tax equilibrium aggregate surplus Deadweight loss $ Before the tax $ Initial equilibrium aggregate surplus b. What are the effects after the government imposes a $8.10 tax per bushel. Complete the table below. $ $ $ 6969 $ 9.64 per bushel billion bushels $ billion billion billion After the tax per bushel billion bushels billion billion billion billion billion

The market demand function for corn is Q = 30 - 2P. The market supply function is QS = 5P-2.5, both measured in billions of bushels per year. Suppose the government imposes a $8.10 tax per bushel. What will be the effects on aggregate surplus, consumer surplus, and producer surplus? What will be the deadweight loss created by the tax? Instructions: Round your quantities to the nearest whole number. Round prices, surpluses and deadweight losses to 2 decimal places. a. What are the initial equilibrium effects? Complete the table below. Initial equilibrium price Initial equilibrium quantity Initial equilibrium consumer surplus Initial equilibrium producer surplus After-tax equilibrium price After-tax equilibrium quantity After-tax equilibrium consumer surplus After-tax equilibrium producer surplus $ Government revenue After-tax equilibrium aggregate surplus Deadweight loss $ Before the tax $ Initial equilibrium aggregate surplus b. What are the effects after the government imposes a $8.10 tax per bushel. Complete the table below. $ $ $ 6969 $ 9.64 per bushel billion bushels $ billion billion billion After the tax per bushel billion bushels billion billion billion billion billion

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter4: Markets In Action

Section: Chapter Questions

Problem 15SQ

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