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1. The graph above illustrates the market for calculators. 5 denotes the current supply curve, and D denotes the demand curve. a. (a) Calculate the
1. The graph above illustrates the market for calculators. 5 denotes the current supply curve, and D denotes the demand curve. a. (a) Calculate the producer surplus before the tax. b. (13) Now assume a per-unit tax of $2 is imposed whose impact is shown in the graph above. i. (1) Calculate the amount of tax revenue. ii. (ii) What is the after-tax price that the sellers now keep? iii. (iii) Calculate the producer surplus after the tax. c. (c) 15 the demand price elastic, inelastic, or unit elastic between the prices of $5 and $6? Explain. d. (d) Assuming no externalities, how does the tax affect allocative efficiency? Explain
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