Asked by Brandon Pimentel on Jun 17, 2024
Verified
Refer to Figure 8-10. Suppose the government places a $3 tax per unit on this good. How much is consumer surplus after the tax is imposed?
Consumer Surplus
The difference between the amount consumers are willing to pay for a good or service versus what they actually pay.
Tax Imposed
A financial charge or other levy placed upon an individual or a legal entity by a governmental organization.
- Grasp the effects of taxation on market equilibrium, particularly in terms of alterations in consumer surplus, producer surplus, and deadweight loss.
Verified Answer
GM
Gianella MejiaJun 17, 2024
Final Answer :
Consumer surplus is 0.5 x 60 x (12-6) = $180 after the tax is imposed.
Learning Objectives
- Grasp the effects of taxation on market equilibrium, particularly in terms of alterations in consumer surplus, producer surplus, and deadweight loss.