Explanation: The following figure shows the result of the tax imposition.

-Refer to the scenario above.After the imposition of the tax,the government collects ________ in tax revenue,and there is a deadweight loss of ________ in the market.Explain your answer with a graph.

Question

Explanation: The following figure shows the result of the tax imposition.
 
-Refer to the scenario above.After the imposition of the tax,the government collects ________ in tax revenue,and there is a deadweight loss of ________ in the market.Explain your answer with a graph.

Quizplus · Accepted Answer

The tax revenue can be calculated as the product of the tax rate and the quantity sold in the market. In this case, the tax rate is $1 per unit and the quantity sold after the tax imposition is 450,000 units ($500,000 in sales revenue divided by $1 per unit tax). Therefore, the tax revenue is $450,000.
The deadweight loss can be calculated as the triangle between the supply and demand curves, bordered by the original quantity and price, and the new quantity and price after the tax imposition. Using the values from the graph, the deadweight loss is ($25 - $20) x (450,000/2) = $50,000.
Thus, the correct answer is C) $450,000; $25,000.

Explanation: the Following Figure Shows the Result of the Tax