Exhibit 7-9
-Exhibit 7-9 shows the effect of a tax on a market. The government's tax revenue equals the combined area of

Question

Exhibit 7-9 
-Exhibit 7-9 shows the effect of a tax on a market. The government's tax revenue equals the combined area of

Quizplus · Accepted Answer

The government's tax revenue from a market is represented by the area between the supply and demand curves over the quantity of goods sold after the tax is imposed. This area is typically depicted as a rectangle whose height is the per-unit tax and whose width is the quantity sold. Therefore, it includes all the areas (C, D, E, and F) that are between the new supply curve (including the tax) and the demand curve over the range of quantities sold.

Exhibit 7-9 -Exhibit 7-9 Shows the Effect of a Tax on a Tax