Group+3+Taxes

=Group 3: Taxes=

The supply of beef in the United States is defined by the equation: math P = 5 + 2Q_{S} math while the demand is defined by the equation: math P = 20 - \frac{1}{2}Q_{D} math Please answer the following questions about the U.S. beef market. Now assume that the United States has decided to impose a tax of $5.00 on all sales of beef. __** Tremaine Johns: **__ 1) Graph the market supply and demand, making sure to label all key points. 2) What is the equilibrium price and quantity in the beef market? The current equilibrium price is $17 and the equilibrium quantity is 6. 3) What is the value of consumer surplus at the current market equilibrium? The value of consumer surplus at the current market equilibrium is $63. I found this answer by finding the total area from the beginning price of the demand curve to the equilibrium price (this representing height of the area), and then multiply by the width, which is 6 (the equilibrium quantity). This answer is then multiplied by ½ to find the total consumer surplus.
 * 1) Graph the market supply and demand, making sure to label all key points.
 * 2)  What is the equilibrium price and quantity in the beef market.
 * 3) What is the value of consumer surplus at the current market equilibrium?
 * 1) Graph the resulting equilibrium. Illustrate on your graph the change in consumer surplus, producer surplus, the tax revenue collected, and the deadweight loss associated with the tax.
 * 2) What is the new equilibrium quantity of beef sold on the market.
 * 3) What price do consumers have to pay for beef? What price do producers earn for their beef?
 * 4) What is the elasticity of demand between the original price of beef and the new price of beef? What about the elasticity of supply?
 * 5) How do the elasticity of supply and demand relate to the deadweight loss associated with the tax?