Figure 8-10 the Vertical Distance Between Points a and B Represents the Represents

question 9

Multiple Choice

Figure 8-10
The vertical distance between points A and B represents the original tax.
-Refer to Figure 8-10.If the government changed the per-unit tax from $5.00 to $2.50,then the price paid by buyers would be $7.50,the price received by sellers would be $5,and the quantity sold in the market would be 1.5 units.Compared to the original tax rate,this lower tax rate would

• A) increase government revenue and increase the deadweight loss from the tax.
• B) increase government revenue and decrease the deadweight loss from the tax.
• C) decrease government revenue and increase the deadweight loss from the tax.
• D) decrease government revenue and decrease the deadweight loss from the tax.

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