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kodGreya [7K]
3 years ago
12

Ken places a $20 value on a cigar, and Mark places a $17 value on it. The equilibrium price for this brand of cigar is $15. Supp

ose the government levies a tax of $3 on each cigar, and the equilibrium price of a cigar increases to $18. How much consumer surplus will be lost because of the imposition of the tax relative to the consumer surplus when there is no tax?
Business
1 answer:
Lerok [7]3 years ago
3 0

Answer:

without tax:  $ 7 consumer surplus

with      tax:  $ 2 consumer surplus

differece: decrease of $5

Explanation:

the consumer surplus is the difference between the amount willing to pay for the good and the equilibrium price:

with no tax:

ken is willing to buy for 20 - 15 equilibrium price =  5

mark is willing to buy for 17 - 15 equilibrium price = 2

total 7

with taxes:

ken is willing to buy for 20 - 18 equilibrium price =  2

mark has no consumer surplus

total 2

difference: 5

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Answer:

Cp= 1.33

Explanation:

Giving the following information:

Meena Chavan​ Corp.'s computer chip production process yields DRAM chips with an average life of 1,800 hours and sigma ​= 100 hours. The tolerance upper and lower specification limits are 2,400 hours and 1,600 ​hours, respectively.

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Which of the following statements best describes the Sherman Act?A. The Sherman Act established the United States Securities and
aleksandr82 [10.1K]

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B. The Sherman Act allows the US government to regulate activities that restrain competition and trade

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The Sherman Act did not work for long as it restrict the business merger and people are confused about knowing the motive of the act as it is not designed properly.

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brainly.com/question/14772910

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