Graph 8-1
-According to Graph 8-1, the tax caused a reduction in consumer surplus, it is represented by area:
A)A
B)B + C
C)D + E

Question

Graph 8-1 
-According to Graph 8-1, the tax caused a reduction in consumer surplus, it is represented by area:
A)A 
B)B + C 
C)D + E

Quizplus · Accepted Answer

The reduction in consumer surplus due to a tax is represented by the areas that were previously part of the consumer surplus but are no longer after the tax is imposed. This includes both the area transferred to the government in the form of tax revenue (area B) and the area representing the deadweight loss (area C), which is the loss in total surplus that neither the consumers nor the government receives.

Graph 8-1 -According to Graph 8-1, the Tax Caused a Reduction in a Reduction