Scenario 12-3 Suppose Roger and Regina Receive Great Satisfaction from Their Consumption

question 365

Multiple Choice

Scenario 12-3
Suppose Roger and Regina receive great satisfaction from their consumption of cheesecake. Regina would be willing to purchase only one slice and would pay up to $8 for it. Roger would be willing to pay $11 for his first slice, $9 for his second slice, and $5 for his third slice. The current market price is $5 per slice.
-Refer to Scenario 12-3. Assume that the government places a $4 tax on each slice of cheesecake and that the new equilibrium price is $9. Which of the following statements is correct?

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