Question
Use Graph 3 - Market for movie tickets, to answer the questions given below. a. Calculate i to vi. Below. Show workings for all your
Use Graph 3 - Market for movie tickets, to answer the questions given below.
a. Calculate i to vi. Below. Show workings for all your calculations
i. Consumer surplus before tax
ii. Consumer surplus after tax
iii. Producer surplus before tax
iv. Producer surplus after tax
v. DWL of the tax
vi. Consumer incidence of the tax as a percentage of the per unit tax
(0.5 marks each part, total 3 marks)
b. Explain why in the market for movie tickets, the sellers carry the higher incidence of tax.
Your explanation should include the relevant economic concepts and apply them to the movie tickets market.
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