Supply & Demand –– Tax Effect
- Author:
- Sam Siesser
The graph below shows the relationship between the Supply Curve and Demand Curve. This graph includes a curve for a fixed tax and how it affects both Supply and Demand. Consumer Surplus and Producer Surplus as well as the adjusted CS and PS are shown in the graph. Deadweight Loss is shown as a result of the Tax Revenue.
Move the "a" bar on the Right Hand Side to adjust the slope of the Demand Curve, Supply Curve, and Tax Curve. This will change the original and adjusted Surpluses.