Figure 8-2

-Refer to Figure 8-2.The amount of tax revenue received by the government is equal to the area
A)P₃ A C P₁.
B)A B C.
C)P₂ D A P₃.
D)P₁ C D P₂.

Question

Figure 8-2
 
-Refer to Figure 8-2.The amount of tax revenue received by the government is equal to the area
A)P₃ A C P₁. 
B)A B C. 
C)P₂ D A P₃. 
D)P₁ C D P₂.

Quizplus · Accepted Answer

The tax revenue received by the government is equal to the area between the supply curve and the demand curve, from the quantity where the tax is imposed (Q₂) to the quantity where the demand curve intersects the y-axis (Q₃). This area is represented by the triangle P₃ A C and the rectangle P₁ C A P₃. Therefore, the correct answer is A) P₃ A C P₁.

Figure 8-2 -Refer to Figure 8-2.The Amount of Tax Revenue Received by Tax