Taxes on Producers

Tax Consumers Surplus Consumers Pay Tax Producers Surplus Deadweight Loss Producers Pay Tax Price Quantity STax S D

Consumers Surplus A B C D E F G Supply+Tax Supply Demand Price($) Quantity 7 6 4 100 120 5 Producers Surplus Consumers Pay Tax Producers Pay Tax Deadweight Loss

A E B C D F G Consumers Surplus A B C D E F G Supply+Tax Supply Demand Price($) Quantity 7 6 4 100 120 5 Producers Surplus E Consumers Pay Tax B C Producers Pay Tax D Deadweight Loss F G

On Producers Tax Consumers Surplus Consumers Pay Tax Producers Surplus Deadweight Loss Producers Pay Tax $6 Price before tax: ______ Price consumers pay after tax: ______ Price producers get after tax: ______ Tax per unit: ______ Total tax revenue: ______ Total spending by consumers: ______ Net revenue for firms: ______ Who pay more tax? ______ Total tax revenue for government before tax: ______ $7 Supply+Tax Supply Demand Price($) Quantity 7 6 4 100 120 5 $4 $3 $300 $700 $400 Consumers pay $1 Producers pay $2 $0

Tax per unit:__________ Total Tax Revenue :__________ Total Spending by consumers :__________ Net Revenue for firms :__________ Who pays more of the tax? __________ How many fewer units are produced because of the tax?___ What was the lost revenue because of the tax? _________ 1.) 5-2=3 2.) 3*12=36 3.) 9*12=108 4.) 6*12=72 5.) Consumers pay two dollars, producers only pay one dollar 6.) 15-12=3 less units are produced 7.)7*15=105-72=33 dollars is the lost revenue

Tax per unit : __________ Total Tax Revenue : __________ 1.) 7-3 = 4 2.) 4*10 = 40 3.) 12*10 = 120 4.) 8*10=80 5.) They pay the same. Tax per unit : __________ Total Tax Revenue : __________ Total Spending by consumers : __________ Net Revenue for firms : __________ Who pays more of the tax? __________