What will be the new cs-ps and tax revenues

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Reference no: EM13224328

The market for pizza has the following demand and supply schedules:
Price, Quantity demanded, Quantity supplied
$4, 135, 39
$5, 104, 53
$6, 85, 60
$7, 68, 68
$8, 53, 78
$9, 39, 85
Suppose the government decides to tax pizza by $3 (raises supply curve by $3).
a. Draw the demand and supply curves, before and after the tax.
b. What will be the CS, PS, tax revenues and deadweight loss?
c. Suppose the government increases the tax to $4 per unit. What will be the new CS, PS, tax revenues and deadweight loss?

Reference no: EM13224328

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