Scenario 12-2 Suppose Regina and Ben Receive Great Satisfaction from Their Consumption

question 12

Multiple Choice

Scenario 12-2
Suppose Regina and Ben receive great satisfaction from their consumption of cheesecake. Regina would be willing to purchase only one slice and would pay up to $13 for it. Ben would be willing to pay $17 for his first slice, $14 for his second slice, and $10 for his third slice. The current market price is $10 per slice.
-Refer to Scenario 12-2. Assume that the government places a $4 tax on each slice of cheesecake and that the new equilibrium price is $14. Which of the following statements is correct?

• A)Ben will bear the full burden of the deadweight loss.
• B)Regina will bear the full burden of the deadweight loss.
• C)Both Regina and Ben will share the burden of the deadweight loss.
• D)There will be no deadweight loss.

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