Suppose the supply for toothpicks is perfectly elastic. After imposing a tax, producer surplus _________ and supplier revenue _________. Group of answer choices stays constant; stays constant decreases; stays constant increases; decreases decreases; decreases stays constant; decreases

Suppose the supply for toothpicks is perfectly elastic. After imposing a tax, producer surplus _ and supplier revenue _. Group of answer choices stays constant; stays constant decreases; stays constant increases; decreases decreases; decreases stays constant; decreases

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section5.A: Appendix: Price Elasticity And Tax Incidence

Problem 2AQ

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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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