Question

Suppose the hawaiian government imposes a tax of $50 per board to help pay for the damage caused by chemical spills in the production of surfboards. if, every day the producer surplus and price is the same as illustrated above, the tax will lead to:

Answer 1

Considering that if the producer surplus and price is the same every day, the tax will lead to all of the above:

A reduction in the producer surplus from each board sold.

A reduction in the consumer surplus from each board bought.

A reduction in the total producer surplus.

A reduction in the total consumer surplus.

Answer 2

Answer:

the tax will lead to:

# Reduction in the consumer surplus from each board they buy.

# Reduction in the total producer surplus based on the imposed tax.

# Reduction in the total consumer and producer surplus