Consider the market for mountain bikes .The following graph shows the demand and supply for mountain bikes before the government imposes any taxes 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 dead weight loss after tax . Note : you can determine the areas of different portions of the graphs by selecting the relevant area Consumer surplus before tax and after tax :Producer surplus before and after tax : Tax revenue after tax :Deadweight loss after tax : First, use the black point (plus symbol) to indicate the equilibrium price and quantity of mountain bikes in the absence of a tax. Then use the greenpoint (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamondsymbol) to shade the area representing total producer surplus (PS) at the equilibrium price.Before TaxDemand200180Equilibrium160140Consumer Surplus12010080Producer Surplus60Supply4020120180240300 36042048054060060QUANTITY (Bikes)the tay wedge created by a tax of $60PRICE (Dollars per bike) First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade thearea representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producersurplus after the tax. Finally, use the black point (plus symbol) to shade the area representing deadweight loss.After TaxDemand200180Tax Revenue160140Consumer Surplus12010080Tax WedgeProducer Surplus60Supply40Deadweight Loss2060120180 240 300360420480540600QUANTITY (Bikes)PRICE (Dollars per bike)

Demand and supply curves are graphical representations used in economics to illustrate the…

Answered: Consider the market for mountain bikes…

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter4: Prices: Free, Controlled, And Relative

Section: Chapter Questions

Problem 4WNG

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Consider the market for mountain bikes .The following graph shows the demand and supply for mountain bikes before the government imposes any taxes 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 dead weight loss after tax . Note : you can determine the areas of different portions of the graphs by selecting the relevant area Consumer surplus before tax and after tax : Producer surplus before and after tax : Tax revenue after tax : Deadweight loss after tax :

First, use the black point (plus symbol) to indicate the equilibrium price and quantity of mountain bikes 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 Tax
Demand
200
180
Equilibrium
160
140
Consumer Surplus
120
100
80
Producer Surplus
60
Supply
40
20
120
180
240
300 360
420
480
540
600
60
QUANTITY (Bikes)
the tay wedge created by a tax of $60
PRICE (Dollars per bike)

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.
After Tax
Demand
200
180
Tax Revenue
160
140
Consumer Surplus
120
100
80
Tax Wedge
Producer Surplus
60
Supply
40
Deadweight Loss
20
60
120
180 240 300
360
420
480
540
600
QUANTITY (Bikes)
PRICE (Dollars per bike)

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