Figure 8-6

-Refer to Figure 8-6.Which of the following statements is correct?
A)Total surplus before the tax was imposed amounted to $250.
B)After the tax is imposed, consumer surplus amounts to 36 percent of its pre-tax value.
C)After the tax is imposed, producer surplus amounts to 36 percent of its pre-tax value.
D)All of the above are correct.

Question

Figure 8-6
 
-Refer to Figure 8-6.Which of the following statements is correct?
A)Total surplus before the tax was imposed amounted to $250. 
B)After the tax is imposed, consumer surplus amounts to 36 percent of its pre-tax value. 
C)After the tax is imposed, producer surplus amounts to 36 percent of its pre-tax value. 
D)All of the above are correct.

Quizplus · Accepted Answer

- Total surplus before the tax was imposed is the sum of consumer surplus and producer surplus, which can be calculated as $150 + $100 = $250. (Statement A is correct)
- After the tax is imposed, consumer surplus decreases from $150 to $96, which is 36 percent of its pre-tax value ($150). (Statement B is correct)
- After the tax is imposed, producer surplus decreases from $100 to $64, which is 36 percent of its pre-tax value ($100). (Statement C is correct)

Figure 8-6 -Refer to Figure 8-6.Which of the Following Statements Is Correct