Sales Tax

The following questions refer to the accompanying diagram shows the effects of a sales tax imposed on consumers. The initial price and quantity are P0 and Q0, respectively. After the tax is imposed, the equilibrium quantity is Q1, firms receive the price Ps, and consumers pay the price Pd.

-Refer to Sales Tax.After the tax is imposed,social gain is equal to

Question

Sales Tax

The following questions refer to the accompanying diagram shows the effects of a sales tax imposed on consumers. The initial price and quantity are P0 and Q0, respectively. After the tax is imposed, the equilibrium quantity is Q1, firms receive the price Ps, and consumers pay the price Pd.

-Refer to Sales Tax.After the tax is imposed,social gain is equal to

Quizplus · Accepted Answer

Social gain after a tax is imposed includes the areas representing consumer surplus, producer surplus, and government revenue minus any deadweight loss. Areas A, B, C, D, F, G, and I together represent these components, excluding the deadweight loss (areas E and H) and not including area J, which typically represents the loss in welfare due to the tax.

Sales Tax the Following Questions Refer to the Accompanying Diagram Shows the Diagram