Given: QD = 160 -5P QS = -11 + 4P In addition, the government imposed a $3.00 tax on the buyer. Calculate the following: (a) Producer surplus after the tax. (b) Deadweight loss. (c) Government revenue.

Given: QD = 160 -5P QS = -11 + 4P In addition, the government imposed a $3.00 tax on the buyer. Calculate the following: (a) Producer surplus after the tax. (b) Deadweight loss. (c) Government revenue.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter3: Market Demand And Supply

Section3.A: Consumer Surplus, Proudcer Suplus, And Market Efficency

Problem 6SQ

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Question

Given:

QD = 160 -5P

QS = -11 + 4P

In addition, the government imposed a $3.00 tax on the buyer.

Calculate the following:

(a) Producer surplus after the tax.

(b) Deadweight loss.

Definition Definition Producer’s gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price and up to the equilibrium quantity.

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