Sales Tax
The following questions refer to the accompanying diagram shows the effects of a sales tax imposed on consumers. The initial price and quantity are P0 and Q0, respectively. After the tax is imposed, the equilibrium quantity is Q1, firms receive the price Ps, and consumers pay the price Pd.
-Refer to Sales Tax.Area C + D + F + G
A) the total value that consumers receive from their purchases.
B) the tax revenue collected by the government.
C) the fall in producers' surplus.
D) the deadweight loss due to the tax.
Correct Answer:
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