For the market for the cigarettes with tax: A. Indicate: Price received by producers Quantity of cigarettes sold Price paid by consumers The tax B. Calculate Consumer surplus after tax Producer suplus after tax Tax revenue Deadweight Loss

For the market for the cigarettes with tax: A. Indicate: Price received by producers Quantity of cigarettes sold Price paid by consumers The tax B. Calculate Consumer surplus after tax Producer suplus after tax Tax revenue Deadweight Loss

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 10PA

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Question

For the market for the cigarettes with tax:

A. Indicate:

Price received by producers
Quantity of cigarettes sold
Price paid by consumers
The tax

B. Calculate

Consumer surplus after tax
Producer suplus after tax
Tax revenue
Deadweight Loss
Total Surplus after tax

Question 5
Suppose that the government imposes a tax on cigarettes. Use the diagram below to answer the questions.
D is the demand curve before tax, S is the supply curve before tax and St is the supply curve after the tax.
Price
18
12
10
10 12
Qua
(a) For the market for cigarettes without the tax. Indicate:
(i)
Price paid by consumers
(ii)
Price paid by producers
(ii)
Quantity of cigarettes sold
(iv)
Buyer's reservation price
(v)
Seller's reservation price

Definition Definition Cost to society created by market inefficiency when supply and demand are not in market equilibrium.

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