Figure 8-21 -Refer to Figure 8-21.Suppose the Market Is Represented by Demand

question 10

Multiple Choice

Figure 8-21
-Refer to Figure 8-21.Suppose the market is represented by Demand 1 and Supply 1.At first the government places a $3 per-unit tax on this good.Then the government decides to raise the tax to $6 per unit.Compared to the original tax rate,the higher tax will

• A)increase tax revenue and increase the deadweight loss from the tax.
• B)not change tax revenue and increase the deadweight loss from the tax.
• C)decrease tax revenue and increase the deadweight loss from the tax.
• D)decrease tax revenue and decrease the deadweight loss from the tax.