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Suppose the current equilibrium price of cheese pizzas is uid and 10 million pizzas are sold per month, Alter the federal government imposes a $3
Suppose the current equilibrium price of cheese pizzas is uid and 10 million pizzas are sold per month, Alter the federal government imposes a $3 00 per pizza tax' the equilibrium price of pizzas rises to $11 00, and the equilibrium quantity falls to 8 million, This situation is illustrated in the graph Compare the economic surp in this market when there ls no tax to when there is a tax on pizza, I ) Use lhe triangle drawmg fool to shade in the change in economic surplus as a result ofthe tax Properly label this shaded area indicating whether surplus has increased (new economic surplus} or decreased (deadweight loss). 2.) Use the rectangle drawing toolte shade in new government revenue as a result of the tax. Properly label this shaded area, Carefully follow the instructions above and only drew the required objects, Price (dollars per pizza) O 2 4 6 8 10 12 14 16 1B 20 Quantity (millions of pizzas per month)
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