Use the Following Information to Answer the Following Questions

question 130

Multiple Choice

Use the following information to answer the following questions.
The following graph depicts a market where a tax has been imposed.P_e was the equilibrium price before the tax was imposed,and Q_e was the equilibrium quantity.After the tax,P_C is the price that consumers pay,and P_S is the price that producers receive.Q_T units are sold after the tax is imposed.NOTE: The areas B and C are rectangles that are divided by the supply curve S_T.Include both sections of those rectangles when choosing your answers.

-What is the amount of the tax,as measured along the y axis?

• A) P_C + P_S
• B) P_e - P_S
• C) P_C - P_S
• D) P_C - P_e
• E) P_e + P_S

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Definitions:

Marginal Product

Marginal Product is the additional output resulting from a one-unit increase in the quantity of a particular input, holding all other inputs constant.

Labor

Refers to the human effort, both physical and mental, used in the production of goods and services.

Output

The amount of goods or services produced by a company, industry, or economy within a certain period.

Revenue

The total income generated by a company or organization from its normal business operations.