(ALL OWNERSHIP GOES TO CENGAGE)Consider the market for air conditioning units. The following graph shows the demand and supply for air conditioning units before the government imposes any taxes.First, use the black point (plus symbol) to indicate the equilibrium price and quantity of air conditioning units in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing total producer surplus (PS) at the equilibrium price.(image below) 2. Taxes and welfareConsider the market for air conditioning units. The following graph shows the demand and supply for air conditioning units before the government imposes any taxes.First, use the black point (plus symbol) to indicate the equilibrium price and quantity of air conditioning units in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing total producer surplus (PS) at the equilibrium price. Before TaxEquilibriumConsumer SurplusProducer Surplus016032048064080096011201280144016001009080706050403020100PRICE (Dollars per air conditioner)QUANTITY (Air conditioners)DemandSupplyArea: 19200 Suppose the government imposes an excise tax on air conditioning units. The black line on the following graph shows the tax wedge created by a tax of $40 per air conditioner.First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade the area representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producer surplus after the tax. Finally, use the black point (plus symbol) to shade the area representing deadweight loss. (image below) Complete the following table by using the previous graphs to determine the values of consumer and producer surplus before the tax, and consumer surplus, producer surplus, tax revenue, and deadweight loss after the tax.Note: You can determine the areas of different portions of the graph by selecting the relevant area.-----Before Tax (Dollars)After Tax (Dollars)Consumer Surplus????Producer Surplus????Tax Revenue0??Deadweight loss0?? PRICE (Dollars per air conditioner)1009080706050403020100DemandSupplyBefore Tax0 160 320 480 640 800 960 1120 1280 1440 1600QUANTITY (Air conditioners)EquilibriumConsumer SurplusProducer Surplus(?) PRICE (Dollars per air conditioner)10090807060 Tax Wedge5040302010Demand0SupplyAfter Tax0 160 320 480 640 800 960 1120 1280 1440 1600QUANTITY (Air conditioners)Tax RevenueAConsumer SurplusProducer SurplusDeadweight Loss

Question

(ALL OWNERSHIP GOES TO CENGAGE)Consider the market for air conditioning units. The following graph shows the demand and supply for air conditioning units before the government imposes any taxes.First, use the black point (plus symbol) to indicate the equilibrium price and quantity of air conditioning units in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing total producer surplus (PS) at the equilibrium price.(image below) 2. Taxes and welfareConsider the market for air conditioning units. The following graph shows the demand and supply for air conditioning units before the government imposes any taxes.First, use the black point (plus symbol) to indicate the equilibrium price and quantity of air conditioning units in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing total producer surplus (PS) at the equilibrium price. Before TaxEquilibriumConsumer SurplusProducer Surplus016032048064080096011201280144016001009080706050403020100PRICE (Dollars per air conditioner)QUANTITY (Air conditioners)DemandSupplyArea: 19200 Suppose the government imposes an excise tax on air conditioning units. The black line on the following graph shows the tax wedge created by a tax of $40 per air conditioner.First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade the area representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producer surplus after the tax. Finally, use the black point (plus symbol) to shade the area representing deadweight loss. (image below) Complete the following table by using the previous graphs to determine the values of consumer and producer surplus before the tax, and consumer surplus, producer surplus, tax revenue, and deadweight loss after the tax.Note: You can determine the areas of different portions of the graph by selecting the relevant area.-----Before Tax (Dollars)After Tax (Dollars)Consumer Surplus????Producer Surplus????Tax Revenue0??Deadweight loss0?? PRICE (Dollars per air conditioner)1009080706050403020100DemandSupplyBefore Tax0 160 320 480 640 800 960 1120 1280 1440 1600QUANTITY (Air conditioners)EquilibriumConsumer SurplusProducer Surplus(?) PRICE (Dollars per air conditioner)10090807060 Tax Wedge5040302010Demand0SupplyAfter Tax0 160 320 480 640 800 960 1120 1280 1440 1600QUANTITY (Air conditioners)Tax RevenueAConsumer SurplusProducer SurplusDeadweight Loss

Accepted Answer

Consumer surplus is the difference between the highest price a consumer is willing to pay and the…

-----	Before Tax (Dollars)	After Tax (Dollars)
Consumer Surplus	??	??
Producer Surplus	??	??
Tax Revenue	0	??
Deadweight loss	0	??