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Old 02-24-2008, 05:40 PM
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Supply and demand curves with taxes imposed?

We are doing supply and demand curves, and now we have a question where a tax is imposed. How does this affect the graph and how do we draw it?

The question is "Using the demand and supply curve below, assume that a tax of $30 is placed on each unit sold. Show how this would affect consumer surplus, seller surplus, tax collected, and dead loss. Calculate by determining exact numbers."
There is a supply/demand curve with the Demand going through 200 on the price and Qx axis, with 100 straight across and 80 going through the the supply/demand intersection.
This is probably kind of confusing, but I basically need to know how a tax affect the graph/curve. Thanks...
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