CONSUMER AND PRODUCER SURPLUS CHANGES AFTER TAXATION
Published: 27 Aug 2015
Abstract: In every market equilibrium we can calculate the values of consumer surplus and producer surplus. These are the values that they get above the price under which they make the transaction. In this paper is analyzed how consumer and producer surplus are being changed with the introducing of taxes. The analysis will be done for taxes which are imposed to buyers as well as for taxes which are imposed to buyers. After the comparison of the taxation effects on consumer surplus and producer surplus, the analysis will show what can determine how much of the tax will be paid by producers and how much by buyers.
Keywords: consumer surplus, producer surplus, elasticity, supply, demand
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