Suppose the government imposes an excise tax on commercial fans. The black line on the following graph shows the tax wedge created by a tax of $60 per fan. First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade the area representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producer surplus after the tax. Finally, use the black point (plus symbol) to shade the area representing deadweight loss. After Tax 150 135 Demand Tax Revenue 120 105 Consumer Surplus 90 Tax Wedge 75 Producer Surplus 60 45 Supply 30 Deadweight Loss 15 PRICE (Dollars per fan) 75 Producer Surplus 60 45 Supply 30 Deadweight Loss 15 100 90 80 70 80 40 50 30 10 20 QUANTITY (Fans) Complete the following table by using the previous graphs to determine the values of consumer and producer surplus before the tax, and consumer surplus, producer surplus, tax revenue, and deadweight loss after the tax. Note: You can determine the areas of different portions of the graph by selecting the relevant area. After Tax Before Tax (Dollars) (Dollars) Consumer Surplus Producer Surplus Tax Revenue Deadweight Loss PRICE (Dollars pe
Suppose the government imposes an excise tax on commercial fans. The black line on the following graph shows the tax wedge created by a tax of $60 per fan. First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade the area representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producer surplus after the tax. Finally, use the black point (plus symbol) to shade the area representing deadweight loss. After Tax 150 135 Demand Tax Revenue 120 105 Consumer Surplus 90 Tax Wedge 75 Producer Surplus 60 45 Supply 30 Deadweight Loss 15 PRICE (Dollars per fan) 75 Producer Surplus 60 45 Supply 30 Deadweight Loss 15 100 90 80 70 80 40 50 30 10 20 QUANTITY (Fans) Complete the following table by using the previous graphs to determine the values of consumer and producer surplus before the tax, and consumer surplus, producer surplus, tax revenue, and deadweight loss after the tax. Note: You can determine the areas of different portions of the graph by selecting the relevant area. After Tax Before Tax (Dollars) (Dollars) Consumer Surplus Producer Surplus Tax Revenue Deadweight Loss PRICE (Dollars pe
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Suppose the government imposes an excise tax on commercial fans. The black line on the following graph shows the tax wedge created by a tax of
$60 per fan.
First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade the
area representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producer
surplus after the tax. Finally, use the black point (plus symbol) to shade the area representing deadweight loss.
After Tax
150
135
Demand
Tax Revenue
120
105
Consumer Surplus
90 Tax Wedge
75
Producer Surplus
60
45
Supply
30
Deadweight Loss
15
PRICE (Dollars per fan)
Transcribed Image Text:75
Producer Surplus
60
45
Supply
30
Deadweight Loss
15
100
90
80
70
80
40
50
30
10
20
QUANTITY (Fans)
Complete the following table by using the previous graphs to determine the values of consumer and producer surplus before the tax, and consumer
surplus, producer surplus, tax revenue, and deadweight loss after the tax.
Note: You can determine the areas of different portions of the graph by selecting the relevant area.
After Tax
Before Tax
(Dollars)
(Dollars)
Consumer Surplus
Producer Surplus
Tax Revenue
Deadweight Loss
PRICE (Dollars pe
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