For the market for the cigarettes with tax:A. Indicate:Price received by producersQuantity of cigarettes soldPrice paid by consumersThe taxB. CalculateConsumer surplus after taxProducer suplus after taxTax revenueDeadweight LossTotal Surplus after tax Question 5Suppose 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.Price18121010 12Qua(a) For the market for cigarettes without the tax. Indicate:(i)Price paid by consumers(ii)Price paid by producers(ii)Quantity of cigarettes sold(iv)Buyer's reservation price(v)Seller's reservation price

Note Mention other questions separately. Thanks. A. Indicate Tax: The per-unit tax would be…

For the market for the cigarettes with tax: A. Indicate: Price received by producers Quantity of cigarettes sold Price paid by consumers The tax B. Calculate Consumer surplus after tax Producer suplus after tax Tax revenue Deadweight Loss

For the market for the cigarettes with tax: A. Indicate: Price received by producers Quantity of cigarettes sold Price paid by consumers The tax B. Calculate Consumer surplus after tax Producer suplus after tax Tax revenue Deadweight Loss

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

For the market for the cigarettes with tax:

A. Indicate:

Price received by producers
Quantity of cigarettes sold
Price paid by consumers
The tax

B. Calculate

Consumer surplus after tax
Producer suplus after tax
Tax revenue
Deadweight Loss
Total Surplus after tax

Question 5
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
10 12
Qua
(a) For the market for cigarettes without the tax. Indicate:
(i)
Price paid by consumers
(ii)
Price paid by producers
(ii)
Quantity of cigarettes sold
(iv)
Buyer's reservation price
(v)
Seller's reservation price

Consumer’s gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price and up to the equilibrium quantity. Consumer surplus is represented by area A.

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