Feb 20, 2025 · Looking at the graph, clearly we can compute CS and PS as areas of triangles. The formula for the area of a triangle is 1/2(base)(height) so we find: CS = 1/2(10 - 6)(4-0) = …

Jun 22, 2023 · Use Word’s Drawing Tools to draw a graph where supply is more inelastic than demand at the initial equilibrium price. Apply a quantity tax. Comment on the tax incidence and …

Total revenue test- When demand is inelastic, an increase in the price will increase the total revenue Double shifts- When two curves shift at the same time, either price or quantity will be …

Figure 3.9 Consumer and Producer Surplus The somewhat triangular area labeled by F shows the area of consumer surplus, which shows that the equilibrium price in the market was less than …

• We can use CS and PS to explicitly calculate the welfare losses caused by restrictions on voluntary transactions –In general, we have to integrate the area between demand and supply. …

In the graph below, the price paid to producers only goes up a little bit (P S). With elastic supply, consumers now benefit from the electric vehicle subsidy with a lower price (P C). o Also, unlike …

In the graph below we can see when the size of the tax is in the middle (medium tax) that is the point where the government collects the maximum tax revenue (at a tax size of 20 and tax …

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We determine consumer surplus (CS), producer surplus (PS), tax revenue, and total surplus with and without the tax. Tax revenue can fund beneficial social services (e.g., education, roads, …

In this course, we explore the fundamental forces of supply and demand, their role in price formation and allocation of scarce resources. We study how consumers and firms make their …