Measuring Welfare: Consumer Surplus & Producer Surplus
Student Worksheet
SweetBrew City's fifty-cent tax cut annual sales from 100 million cans to 80 million, and the lost welfare split three ways, with $40 million becoming tax revenue, consumer surplus falling $25 million, and producer surplus dropping $20 million, leaving $5 million as pure deadweight loss. Researchers later credited the lower consumption with preventing 2,000 obesity related hospitalizations, worth about $10 million in societal benefit.
Where should I send the next one?
Everything here is free and it stays that way. Leave your email and I'll send you the new lessons as they go up. You can unsubscribe from any one of them.
Did this save you a prep period? You can chip in toward my three kids' daycare fund. Everything on this site stays free either way.