According to the figure above, producer surplus in the market is: $15,000. $30,0

Question

According to the figure above, producer surplus in the market is:

$15,000.

$30,000.

$40,000.

$12,500.

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Question 101 pts

Suppose the government imposes a $0.55 per-unit tax in this market. After tax, consumers are paying (including tax) $8.25 per unit and the market output is 4,750 units.

How much deadweight loss does the tax cause?  

$137.50

$68.75

$47.50

$0.55

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Question 111 pts

After tax, what is consumer surplus in the market (rounded to the nearest whole number)?

$12,431

$12,500

$13,538

$11,281

Explanation / Answer

producer surplus=market price-lowest price the producer willing to accept

So here PS=1/2(8-2)(500)=3x500=1500

DWL=(change in price x change in quantity)/2=(8.25-8)(250)/2=(.25x250)/2=31.25

Consumer surplus=maximum price the consumer is willing to pay-market price=1/2(13-8.25)47450=11281.25

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