Explain what is meant by consumer surplus and use diagrams to assess the impact on consumer surplus when an indirect tax is imposed on a good with price-elastic demand compared with the impact when the demand is price-inelastic.

Economics

IGCSE&ALevel

CAIE

Exam No：9708_w21_qp_22 Year：2021 Question No：3(a)

Answer:

2.5.1 meaning and significance of consumer surplus

2.5.4 significance of price elasticity of demand and of supply in determining the extent of these changes

3.2.1 impact and incidence of specific indirect taxes

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