1.6. Use the graph below that shows the effect of a

$4 per-unit tax on suppliers to answer the following questions:

a. What are equilibrium price and quantity before the tax? After the tax?

b. What is producer surplus when the market is in equilibrium before the tax? After the tax?

c. What is consumer surplus when the market is in equilibrium before the tax? After the tax?

d. What is total tax revenue collected after the tax is implemented?

Transcribed Image Text:

Price $14 12 St 10 $4 So 00 6 4 2 0 Demand 100 200 300 400 500 Quantity