Suppose the current equilibrium price of cheese pizzas is $9.00, and 10 million pizzas are sold per month. after the federal government imposes a $4.00 per pizza tax, the equilibrium price of pizzas rises to $11.00, and the equilibrium quantity falls to 6 million. compare the economic in this market when there is no tax to when there is a tax on pizza. with the tax, the change in economic surplus is

The producer surplus before tax is $45 million.

The producer surplus after tax is $33 million.

Explanation:

The producer surplus is the difference between the minimum price a producer is willing to accept and the price he really gets.

The imposition of a tax reduces the price received by a seller such that the supply curve shifts to the left. The equilibrium quantity decreases.

The producer surplus before tax

=

=

= $45 million

The producer surplus after tax

=

=

= $33 million

With the imposition of tax the producer surplus falls by $12 million.

cash flow statement possibly

i think the answer would be b hope this