Figure 8-8 Suppose the Government Imposes a $10 Per Unit Tax on Tax

question 19

Multiple Choice

Figure 8-8
Suppose the government imposes a $10 per unit tax on a good.
-Refer to Figure 8-8.After the tax goes into effect,consumer surplus is the area

• A)A.
• B)B+C.
• C)A+B+C.
• D)A+B+D+J+K.

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Definitions:

Contribution Margin

The amount of revenue from sales that exceeds variable costs, indicating the contribution of sales to fixed costs and profit.