Graph 9-9
-In Graph 9-9, as a result of the tariff, deadweight loss would be:
A)E
B)B
C)D + F
D)B + D + E + F

Question

Graph 9-9 
-In Graph 9-9, as a result of the tariff, deadweight loss would be:
A)E 
B)B 
C)D + F 
D)B + D + E + F

Quizplus · Accepted Answer

Deadweight loss refers to the loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved. In the graph, the loss in consumer surplus is represented by area B + D and the loss in producer surplus is represented by area E + F. Therefore, the total deadweight loss is equal to B + D + E + F. However, since the question specifically asks for the deadweight loss resulting from the tariff, we need to focus on the change in economic efficiency due to the tariff. In this case, the tariff increases the price that consumers pay and decreases the price that producers receive. As a result, the quantity demanded decreases (from Q1 to Q2) and the quantity supplied increases (from Q1 to Q3), creating a deadweight loss represented by area D + F. Therefore, the tariff results in a deadweight loss equal to choice letter C (D + F).

Graph 9-9 -In Graph 9-9, as a Result of the Tariff, Deadweight