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7 Q9 The table shows the maximum willingness to pay and sellers cost for a can of diet soda. The government asks your advice about
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Q9 The table shows the maximum willingness to pay and sellers cost for a can of diet soda. The government asks your advice about the effect of excise tax of $0.4 per can of soda Consumer Willingness to pay Producer Seller's cost Ana $0.7 Zhang $0.1 Bernice 0.6 Yves 0.2 Chizuko 0.5 Xavier 0.3 Dagmar 0.4 Walter 0.4 Ella 0.3 Ver 0.5 (a) Without the tax, what is the equilibrium price and quantity? (b) With the excise tax of $0.4, what is the quantity transacted? (c) Without the excise tax, how much individual consumer surplus does each of the consumers gain? How much with tax? How much total consumer surplus is lost as a result of the tax? (d) Without the excise tax, how much individual producer surplus does each of the producers gain? How much with the tax? How much total producer surplus is lost as a result of the tax? (e) How much government revenue does the excise tax create? (f) What is the deadweight loss from the imposition of this excise taxStep by Step Solution
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