Question
***This is what I answered but I am very unsure of its accuracy. Any critics are appreciated! 15.) In the market situation below, indicate CLEARLY
***This is what I answered but I am very unsure of its accuracy. Any critics are appreciated!
15.) In the market situation below, indicate CLEARLY how a $1 tax per pound on beef production would affect the following (make sure the price effects on the graph are consistent with the $1.00 tax)
A)the supply curve (S1)
B)the equilibrium price and quantity (P1, Q1, E1)
Supply curve would shift to the left due to tax applied. Higher cost of production due to tax and lowers quantity bought output which means a leftward shift of the curve.
The supply curve shifts up vertically by exactly $1, the change in marginal cost given, that they now have to pay a $1 tax. The new equilibrium market price rises.
C) Indicate the change in consumer surplus
D) Indicate the change in producer surplus
E) Indicate the tax revenue collected
F) Indicate the deadweight loss
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