Price per poundPrice per pound$9896573210$98765432-NPanel (a)An increase in demandLOPanel (c)An increase in supplyS₁5 10 15 20 25 30 35 40 45Quantity (millions of pounds per month)D₁D₂S₁S₂0 5 10 15 20 25 30 35 40 45Quantity (millions of pounds per month)Price per poundPrice per pound$987621$98765Panel (b)A decrease in demand4321D₂0 5 10 15 20 25 30 35 40 45Quantity (millions of pounds per month)D₁Panel (d)A decrease in supply$₂S₁D₁0 5 10 15 20 25 30 35 40 45Quantity (millions of pounds per month) It is summer ... and ice cream time. Use the supply and demand curve sheets you were provided tothink about the short-run ice cream market. Ice cream is a normal good.Consider Panel d. The shift seen is due to a per unit production tax in ice cream.What is the lost consumer surplus due to the tax (in $millions)?$10$17.50$20$150O $35$25$140O $22.50O $7.50

The lost consumer surplus is this yellow area Try find this area.

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Economics

What is the lost consumer surplus due to the tax (in $millions)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Price per pound
Price per pound
$9
8965
7
32
1
0
$9
8
7
6
5
4
3
2
-N
Panel (a)
An increase in demand
LO
Panel (c)
An increase in supply
S₁
5 10 15 20 25 30 35 40 45
Quantity (millions of pounds per month)
D₁
D₂
S₁
S₂
0 5 10 15 20 25 30 35 40 45
Quantity (millions of pounds per month)
Price per pound
Price per pound
$9
8
7
6
2
1
$9
8
7
65
Panel (b)
A decrease in demand
4
3
2
1
D₂
0 5 10 15 20 25 30 35 40 45
Quantity (millions of pounds per month)
D₁
Panel (d)
A decrease in supply
$₂
S₁
D₁
0 5 10 15 20 25 30 35 40 45
Quantity (millions of pounds per month)

It is summer ... and ice cream time. Use the supply and demand curve sheets you were provided to
think about the short-run ice cream market. Ice cream is a normal good.
Consider Panel d. The shift seen is due to a per unit production tax in ice cream.
What is the lost consumer surplus due to the tax (in $millions)?
$10
$17.50
$20
$150
O $35
$25
$140
O $22.50
O $7.50

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