The vertical distance between points A and B represents a tax in the market. Price 24 22 20+ 18+ 16 14+ 12 10+ 8 6+ 4 2 Supply Demand 5 10 15 20 25 30 35 40 45 50 55 60 Quantity As a result of the tax, consumer surplus decreases by $65, producer surplus decreases by $85, tax revenue is $120, and deadweight loss is $30. $75, producer surplus decreases by $75, tax revenue is $120, and deadweight loss is $30. $80, producer surplus decreases by $80, tax revenue is $120, and deadweight loss is $40. $120, producer surplus decreases by $120, tax revenue is $200, and deadweight loss is $40.

The vertical distance between points A and B represents a tax in the market. Price 24 22 20+ 18+ 16 14+ 12 10+ 8 6+ 4 2 Supply Demand 5 10 15 20 25 30 35 40 45 50 55 60 Quantity As a result of the tax, consumer surplus decreases by $65, producer surplus decreases by $85, tax revenue is $120, and deadweight loss is $30. $75, producer surplus decreases by $75, tax revenue is $120, and deadweight loss is $30. $80, producer surplus decreases by $80, tax revenue is $120, and deadweight loss is $40. $120, producer surplus decreases by $120, tax revenue is $200, and deadweight loss is $40.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Application: The Cost Of Taxation

Section: Chapter Questions

Problem 8PA

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