. Jason and Freddy enjoy warming up with some soothing Venti Pumpkin Spice Lattes on a cool October day. Luckily for Jason and Freddy, Scarbucks is a firm that produces Venti Pumpkin Spice Lattes. The market for Venti Pumpkin Spice Lattes is represented by the following graph: Venti Pumpkin Spice Lattes P $7 S $6 $5 ..... $4 $3 D 10 Q Answer the following questions based on the information contained in the graph above. In the competitive market for Venti Pumpkin Spice Lattes (PSLs): 1. What is the competitive equilibrium price of a PSL?: P* = $____________ 2. What is the competitive equilibrium quantity of PSLs?: Q\" = _____________ Lattes 3. How much Consumer Surplus is created in this market?: GS = $____________ 4. How much Producer Surplus is created in this market?: P3 = $ ,,,,,,,,,,,, 5. How much Total Surplus is created in this market?: T3 = $____________ 6. How much Dead Weight Loss is created in this market?: DWL = $,,,,,,,,,,,, Suppose the government decides that because PSLs are so good, a tax of $2 /latte should be imposed on the consumers of PSLs. P Venti Pumpkin Spice Lattes 10. 11. 12. 13. . What price will Consumers now have to pay for a PSL?: PC = $____________ . What price will Producers now receive for a PSL, after the tax?: Pp = $____________ How many PSLS Will now be sold?: Q = _____________ Lattes HOW much Consumer Surplus is created in this market?: GS = $ ____________ How much Producer Surplus is created in this market?: P8 = $____________ HOW much total Tax Revenue does the government receive in this market?: TAX REV = $_________ HOW much Dead Weight Loss is created in this market?: DWL = $,,,,,,,,,,,, Now suppose that the Demand curve is actually slightly more inelastic, and the Supply curve is actually much more elastic than in the previous graphs, as shown in the following gure. Notice that a $2 / latte tax is still implemented. P Venti Pumpkin Spice Lattes $7.50 $6.50 0 4 10 Q 14. What price will Consumers now have to pay for a PSL?: PC = $____________ 15. What price will Producers now receive for a PSL, after the tax?: Pp = $____________ 16. How many PSLs will now be sold?: Q = _____________ Lattes 17. How much Consumer Surplus is created in this market?: CS = $ ____________ 18. How much Producer Surplus is created in this market?: P3 = $____________ 19. How much Tax Revenue does the government receive in this market?: TAX REV = $---,---,, 20. How much Dead Weight Less is created in this market?: DWL = $____________