Suppose a tax is levied in the market for soda. Consider a $0.50 excise tax on producers for each soda sold. The graph illustrates the demand and supply
d. What is the consumer surplus generated after the imposition of the tax? Shade in this area on the graph.
Instructions: Use the tool provided “CStax” to illustrate this area on the graph.
Consumer surplus after the imposition of the tax is $ thousand.
e. What is the
Instructions: Use the tool provided “PStax” to illustrate this area on the graph.
Producer surplus after the imposition of the tax is $ thousand.
f. What is the total revenue generated from the tax? Shade in this area on the graph.
Instructions: Use the tool provided “TR” to illustrate this area on the graph.
Tax revenue from the tax after the imposition of the tax is $ thousand.
g. What is the total economic surplus generated after the imposition of the tax?
Total economic surplus after the imposition of the tax is $ thousand.
h. What is the
Instructions: Use the tool provided “DWL” to illustrate this area on the graph.
The deadweight loss after the imposition of the tax is $ thousand.
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