Graph 8-1
-According to Graph 8-1, after the tax is levied, consumer surplus is represented by area:
A)A
B)A + B + C
C)D + E + F

Question

Graph 8-1 
-According to Graph 8-1, after the tax is levied, consumer surplus is represented by area:
A)A 
B)A + B + C 
C)D + E + F

Quizplus · Accepted Answer

Consumer surplus is the difference between the price consumers are willing to pay for a good and the price they actually pay. After the tax is levied, the price consumers pay increases, so consumer surplus decreases. Area A represents the decrease in consumer surplus.

Graph 8-1 -According to Graph 8-1, After the Tax Is Levied, Consumer