Use the Following Information to Answer the Following Questions

question 24

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 total amount of producer and consumer surplus (i.e. ,social welfare) in this market before the tax is imposed?

• A) A + B + C + E + F + G
• B) A + C
• C) A + B + C + E
• D) F + G
• E) B + C+ F + G

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Definitions:

Marginal Revenue

The supplementary income generated from the sale of an additional good or service by a firm.

Total Revenue

The entire amount of income generated by the sale of goods or services by a firm.

Market Price

The prevailing rate at which a product or service is available for purchase or sale in a market driven by competition.

Marginal Revenue

Marginal revenue is the additional income received from selling one more unit of a good or service.