Figure 8-7 the Vertical Distance Between Points a and B Represents a Represents

question 90

Multiple Choice

Figure 8-7
The vertical distance between points A and B represents a tax in the market.

-Refer to Figure 8-7.Which of the following statements is correct?

• A) The loss of producer surplus that is associated with some sellers dropping out of the market as a result of the tax is $30.
• B) The loss of consumer surplus for those buyers of the good who continue to buy it after the tax is imposed is $60.
• C) The loss of consumer surplus caused by this tax exceeds the loss of producer surplus caused by this tax.
• D) This tax produces $200 in tax revenue for the government.

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