Question 5 Suppose that the government imposes a tax on cigarettes. Use the diagram below to answer the questions. D is the demand curve before tax, S is the supply curve before tax and St is the...

For the market for the cigaretteswith tax:

A. Indicate:

• Price received by producers


• Quantity of cigarettes sold


• Price paid by consumers


• The tax

B. Calculate

• Consumer surplus after tax


• Producer suplus after tax


• Tax revenue


• Deadweight Loss


• Total Surplus after tax

Extracted text: Question 5 Suppose that the government imposes a tax on cigarettes. Use the diagram below to answer the questions. D is the demand curve before tax, S is the supply curve before tax and St is the supply curve after the tax. Price 18 12 10 10 12 Qua (a) For the market for cigarettes without the tax. Indicate: (i) Price paid by consumers (ii) Price paid by producers (ii) Quantity of cigarettes sold (iv) Buyer's reservation price (v) Seller's reservation price