In the diagram above,D represents the original demand curve,S represents the original supply curve,and S' represents the supply curve once a per-unit tax is imposed.
-Refer to the diagram above.The loss in efficiency due to the tax is represented by the area______ and stems from ______.
A) IJC;the trades that do not occur because of the tax
B) IHC;consumer unrest about higher prices
C) HJC;producer dissatisfaction with lower revenue
D) EGJI;wasteful use of the tax revenue by government
E) EAHI;consumer resentment over taxation

Question

In the diagram above,D represents the original demand curve,S represents the original supply curve,and S' represents the supply curve once a per-unit tax is imposed.
-Refer to the diagram above.The loss in efficiency due to the tax is represented by the area______ and stems from ______.
A) IJC;the trades that do not occur because of the tax 
B) IHC;consumer unrest about higher prices 
C) HJC;producer dissatisfaction with lower revenue 
D) EGJI;wasteful use of the tax revenue by government 
E) EAHI;consumer resentment over taxation

Quizplus · Accepted Answer

The loss in efficiency due to the tax is represented by the area IJC, which is the deadweight loss from the trades that do not occur because the tax makes them unprofitable.

In the Diagram Above,D Represents the Original Demand Curve,S Represents