-In the figure above, S is the supply curve and D is the demand curve in the unregulated, competitive market for gasoline in Motorland. The external cost of gasoline is constant at $1.50 per gallon. Suppose Motorland's government imposes a tax of $1.50 per gallon of gasoline sold. With the tax, when the market is in equilibrium, the deadweight loss is
A) zero.
B) $37,500 per month.
C) $150,000 per month.
D) $75,000 per month.

Question

-In the figure above, S is the supply curve and D is the demand curve in the unregulated, competitive market for gasoline in Motorland. The external cost of gasoline is constant at $1.50 per gallon. Suppose Motorland's government imposes a tax of $1.50 per gallon of gasoline sold. With the tax, when the market is in equilibrium, the deadweight loss is
A) zero. 
B) $37,500 per month. 
C) $150,000 per month. 
D) $75,000 per month.

Quizplus · Accepted Answer

The Answer of 
-In the figure above, S is the supply curve and D is the demand curve in the unregulated, competitive market for gasoline in Motorland. The external cost of gasoline is constant at $1.50 per gallon. Suppose Motorland's government imposes a tax of $1.50 per gallon of gasoline sold. With the tax, when the market is in equilibrium, the deadweight loss is
A) zero. 
B) $37,500 per month. 
C) $150,000 per month. 
D) $75,000 per month.

-In the Figure Above, S Is the Supply Curve and D