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Figure: The Market for Blue Jeans
-(Figure: The Market for Blue Jeans) Look at the figure The Market for Blue Jeans. The government recently levied a $10 tax on the producers of blue jeans. What area or areas in the graph identify deadweight loss?

Question

Use the following to answer questions:
Figure: The Market for Blue Jeans 
-(Figure: The Market for Blue Jeans) Look at the figure The Market for Blue Jeans. The government recently levied a $10 tax on the producers of blue jeans. What area or areas in the graph identify deadweight loss?

Quizplus · Accepted Answer

Deadweight loss is represented by the area of the triangle that is lost due to the tax, which is typically the area between the supply and demand curves that is not covered by tax revenue. In this case, it is area c + e.

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