Tax revenue and dead weight loss

Name :

  1. Use the following graph for the market for trinkets to answer the questions :

1 . 1 Looking at the graph , which is more elastic : supply or demand ? How do you know ?

1 . 2 Suppose a $ 2 . 50 is imposed on the buyers in this market . Draw the new demand curve ( that determines the new quantity ) on the graph above , and show where the consumer surplus , producer surplus , tax revenue and dead weight loss is .

1 . 3 What is the new quantity of trinkets sold ? At what price to buyers pay ? What price do sellers recieve ?

1 . 4 Calculate the tax revenue and the dead weight loss ( hint : the area of a rectangle is base times height . the area of a triangle is 1/2 times height ) .

For access towards the solution of the above assignment email : or chat with us live

Submit Assignment

Fill in the form below or give us a call and we'll contact you. We endeavour to answer all enquiries within 24-48 hours on business days.
[contact-form-7 id="7458"]