Use the following to answer questions:
Figure: A Market with a Tax
-(Figure: A Market with a Tax) Look at the figure A Market with a Tax. The efficiency loss resulting from this tax is:

Question

Use the following to answer questions:
Figure: A Market with a Tax 
-(Figure: A Market with a Tax) Look at the figure A Market with a Tax. The efficiency loss resulting from this tax is:

Quizplus · Accepted Answer

The efficiency loss, or deadweight loss, from a tax is represented by the area of the triangle formed between the supply and demand curves, which is calculated as 0.5 times the tax (P1 - P3) times the reduction in quantity (Q2 - Q1).

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