Suppose a Tax on Buyers Has Been Imposed in the Graph

question 26

Multiple Choice

Suppose a tax on buyers has been imposed in the graph shown.The amount of deadweight loss generated by this tax is:

• A) $0.
• B) $18.
• C) $36.
• D) $72.

---

Definitions:

Fixed Manufacturing Overhead

Costs that do not change with the level of production, such as rent, salaries, and insurance for the manufacturing facilities.

Budget Variance

The difference between the budgeted or baseline amount of expense or revenue, and the actual amount.

Insurance Rates

The cost per unit of coverage set by insurance companies, determining the premium paid by policyholders.

Volume Variance

The difference between the expected volume of sales or production and the actual volume, which affects budgeting and operational planning.