Figure 8-7
The vertical distance between points A and B represents a tax in the market.

-Refer to Figure 8-7.Which of the following statements is correct?
A) Total surplus before the tax is imposed is $250.
B) After the tax is imposed, consumer surplus is 45 percent of its pre-tax value.
C) After the tax is imposed, producer surplus is 45 percent of its pre-tax value.
D) All of the above are correct.

Question

Figure 8-7
The vertical distance between points A and B represents a tax in the market.
 
-Refer to Figure 8-7.Which of the following statements is correct?
A) Total surplus before the tax is imposed is $250. 
B) After the tax is imposed, consumer surplus is 45 percent of its pre-tax value. 
C) After the tax is imposed, producer surplus is 45 percent of its pre-tax value. 
D) All of the above are correct.

Quizplus · Accepted Answer

The Answer of Figure 8-7
The vertical distance between points A and B represents a tax in the market.
 
-Refer to Figure 8-7.Which of the following statements is correct?
A) Total surplus before the tax is imposed is $250. 
B) After the tax is imposed, consumer surplus is 45 percent of its pre-tax value. 
C) After the tax is imposed, producer surplus is 45 percent of its pre-tax value. 
D) All of the above are correct.

Figure 8-7 the Vertical Distance Between Points a and B Represents a Represents