Then, use the purple point (diamond symbol) to shade the area representing total producer surplus after the tax. Next, use the green point (triangle symbol) to shade the area representing total consumer surplus after the tax. ![]() First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. The black line on the following graph shows the tax wedge created by a tax of $80 per bike. Suppose the government imposes an excise tax on mountain bikes. ? Before Tax 200 180 Demand Equilibrium 160 140 120 X Consumer Surplus PRICE (Dollars per bike) 100 80 Producer Surplus GO Supply 40 20 0 0 60 120 180 480 540 600 240 300 360 420 QUANTITY (Bikes) Suppose the government imposes an excise tax on mountain bikes. Next, use the purple point (diamond symbol) to shade the area representing total producer surplus (PS) at the equilibrium price. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. First, use the black point (plus symbol) to indicate the equilibrium price and quantity of mountain bikes in the absence of a tax. ![]() The following graph shows the demand and supply for mountain bikes before the government imposes any taxes. ![]() Transcribed image text: Consider the market for mountain bikes.
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