Question: Consider the graph below. Suppose that the initial demand and supply curves are D1and S1and the initial equilibrium quantity is Q2and the initial equilibrium price
Consider the graph below. Suppose that the initial demand and supply curves are D1and S1and the initial equilibrium quantity is Q2and the initial equilibrium price is $6. If the government imposes a $4 excise tax on the production of the good, then

mem O the decrease in consumers surplus is given by the area szxu and the decrease in producers surplus is given by the area rgzs. O the increase in consumers surplus is given by the area hbcr and the increase in producers surplus is given by the area rczs. O the decrease in consumers surplus is given by the area szwu and the decrease in producers surplus is given by the area rczs. O the increase in consumers surplus is given by the area rczs and the increase in producers surplus is given by the area szvvu. O the decrease in consumers surplus is given by the area nggQgL and the decrease in producers surplus is given by the area szng. O the decrease in consumers surplus is given by the area rgzs and the decrease in producers surplus is given by the area szxu
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