Unformatted text preview: (c) Calculate the amount of lost consumer surplus, lost producer surplus. Calculate the amount of the dead-weight loss. (d) What would be the quantity sold if instead of a tax the government imposed a price ﬂoor of $206? Does this minimum price actually reduce the amount of cigarettes sold on the market? What is the lowest minimum price government could impose that would impact the market? (e) Calculate the amount of lost consumer surplus, change to the producer surplus. Calculate the amount of the dead-weight loss. (f) You’re an advisor for the Governor. What policy instrument would you recom-mend she use to reduce smoking? (Taxes or minimum price) Why?...
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This note was uploaded on 10/14/2010 for the course DDF 1124-445 taught by Professor Gorthermclays during the Spring '10 term at Florida College.
- Spring '10