Figure 8-1
-Refer to Figure 8-1.Suppose a $3 per-unit tax is placed on this good.The amount of deadweight loss resulting from this tax is

Name: Figure 8-1 -Refer to Figure 8-1.Suppose a $3 per-unit tax is placed on this good.The amount of deadweight loss resulting from this tax is
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Question

Figure 8-1 
-Refer to Figure 8-1.Suppose a $3 per-unit tax is placed on this good.The amount of deadweight loss resulting from this tax is

Quizplus · Accepted Answer

The deadweight loss from a tax is calculated as 0.5 * tax per unit * reduction in quantity sold. If the tax is $3 and the reduction in quantity is 5 units, the deadweight loss is 0.5 * 3 * 5 = $7.50.

Figure 8-1 -Refer to Figure 8-1.Suppose a $3 Per-Unit Tax Is Placed