Refer to the graph shown. Assume that the market is initially in equilibrium at a price of $6 and a quantity of 40 units. If the government imposes a $2 per-unit tax on this product, consumer surplus will fall from:
A) 80 to 45.
B) 160 to 90.
C) 90 to 45.
D) 160 to 80.

Question

Refer to the graph shown. Assume that the market is initially in equilibrium at a price of $6 and a quantity of 40 units. If the government imposes a $2 per-unit tax on this product, consumer surplus will fall from: 
A) 80 to 45. 
B) 160 to 90. 
C) 90 to 45. 
D) 160 to 80.

Quizplus · Accepted Answer

The Answer of Refer to the graph shown. Assume that the market is initially in equilibrium at a price of $6 and a quantity of 40 units. If the government imposes a $2 per-unit tax on this product, consumer surplus will fall from: 
A) 80 to 45. 
B) 160 to 90. 
C) 90 to 45. 
D) 160 to 80.

Refer to the Graph Shown