Figure 8-7 the Vertical Distance Between Points a and B Represents a Represents

question 106

Multiple Choice

Figure 8-7
The vertical distance between points A and B represents a tax in the market.
-Refer to Figure 8-7.The deadweight loss associated with this tax amounts to

• A)$80,and this figure represents the amount by which tax revenue to the government exceeds the combined loss of producer and consumer surpluses.
• B)$80,and this figure represents the surplus that is lost because the tax discourages mutually advantageous trades between buyers and sellers.
• C)$60,and this figure represents the amount by which tax revenue to the government exceeds the combined loss of producer and consumer surpluses.
• D)$60,and this figure represents the surplus that is lost because the tax discourages mutually advantageous trades between buyers and sellers.