Microeconomics 2nd Edition by Douglas Bernheim

Exercise 1

The market demand function for corn is Q d = 15 2 P and the market supply function is Q s = 5 P 2.5, both measured in billions of bushels per year. Suppose the government imposes a $1.40 tax on each bushel of corn. What will be the effects on aggregate surplus, consumer surplus, and producer surplus What will be the deadweight loss caused by the tax