Calculates the surplus analysis for a pay-as-you-go tax system.
Author: shiroeExecutions: 1067
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Assume the demand function is of the form D = b + aP. Assume the supply function is of the form S = f + cP. Pay attention to signs when entering values (especially negative signs).
If the question specifies an inverse demand function or inverse supply function, adjust the form accordingly and enter the coefficients and constant terms. Be careful, as some questions may omit the word “inverse” from “inverse ~.” Ad valorem taxes are not considered here when they are negative (e.g., in the case of subsidies). Please enter values of zero or greater.If the system determines that a question is not appropriate for an economics problem, it will not generate an output. Zero or negative equilibrium quantities are not handled here. Assume that the ad valorem tax is levied on sellers, who pass the tax on to buyers. We will calculate surplus analysis and output the ratio of price elasticity of demand to price elasticity of supply, as well as the tax burden ratio, based on these relationships. We assume that government surplus is tax revenue. We will address cases where tax revenue is included in total surplus (social surplus).
If the question specifies an inverse demand function or inverse supply function, adjust the form accordingly and enter the coefficients and constant terms. Be careful, as some questions may omit the word “inverse” from “inverse ~.” Ad valorem taxes are not considered here when they are negative (e.g., in the case of subsidies). Please enter values of zero or greater.If the system determines that a question is not appropriate for an economics problem, it will not generate an output. Zero or negative equilibrium quantities are not handled here. Assume that the ad valorem tax is levied on sellers, who pass the tax on to buyers. We will calculate surplus analysis and output the ratio of price elasticity of demand to price elasticity of supply, as well as the tax burden ratio, based on these relationships. We assume that government surplus is tax revenue. We will address cases where tax revenue is included in total surplus (social surplus).
| Pre-tax consumer surplus | (Before assessment) |
| Pre-tax Producer Surplus | (Before assessment) |
| Tax Revenue Before Taxes | (Since it’s before billing, it equals 0.) |
| Total Surplus Before Taxes | (Social surplus before taxation) |
| Post-Tax Consumer Surplus | (After assessment) |
| Post-Tax Producer Surplus | (After assessment) |
| Tax Revenue After Taxes | (Tax revenue after assessment) |
| Total Surplus After Taxes | (Social Surplus After Taxation) |
| Dead load | (Loss of welfare) |
| Price elasticity of demand at the pre-tax equilibrium point | (Multiplying by -1) |
| Price elasticity of supply at the pre-tax equilibrium point | |
| Price elasticity of demand at the post-tax equilibrium point | (Multiplying by -1) |
| Price elasticity of supply at the post-tax equilibrium point | |
| Consumer Tax Burden | |
| Tax Burden on Producers | |
| Elasticity Ratio | (The ratio is supply to demand.) |
| Tax Burden Ratio | (The ratio is "eliminated/new.") |
| Pre-tax Equilibrium Price | (Before assessment) |
| Pre-tax Equilibrium Quantity | (Before assessment) |
| Post-Tax Equilibrium Price | (After assessment) |
| Post-Tax Equilibrium Quantity | (After assessment) |
R5 (2023). 09/10 (Sun)_test_Pay-as-you-go Tax_Ver.001
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We will calculate the equilibrium price, equilibrium quantity, and deadweight loss (loss of welfare). We will also calculate the elasticity ratios and tax burden ratios.
Assume that the demand and supply functions are linear equations.
Please do not confuse this with an ad valorem tax.