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No, the price paid by the consumers for the quantity of jet planes will not increase by the same amount as the tax
(a) A correctly labelled graph for demand and supply for jet planes is attached
(b) The solution to the whole of the questions given here is mentioned in the graph attached
(c) Calculating the producer surplus:
Producer surplus = Total Revenue ( TR ) - Total cost ( TC )
Where Total Cost = Cost Average ( AC) * quantity,q
TR = $2000 * 50 = $100,000
TC = $1000 * 50 = $50,000
Product surplus = $10,000 - $50,000 = $50,000
(d) No, the price paid by the consumers for the quantity of jet planes will not increase by the same amount as the tax
(e) In the market for jet planes, the loss in consumer and producer supply will balance than the tax revenue collected by the government as tax
<h3>What is demand and supply?</h3>Demand simply refers to the quantity of consumers who are willing and able to buy particular products at various prices during a given period of time.
However, supply on the other hand, is a fundamental economic concept which describes the total amount of a specific goods or services that is available to consumers.
So therefore, in the market for jet planes, the loss in consumer and producer supply will balance than the tax revenue collected by the government as tax
Learn more about demand and supply:
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