Figure 8-6

-Refer to Figure 8-6.Which of the following statements is correct?
A)The loss of producer surplus that is associated with some sellers dropping out of the market as a result of the tax is $30.
B)The loss of consumer surplus for those buyers of the good who continue to buy it after the tax is imposed is $60.
C)The loss of consumer surplus caused by this tax exceeds the loss of producer surplus caused by this tax.
D)This tax produces $200 in tax revenue for the government.

Question

Figure 8-6
 
-Refer to Figure 8-6.Which of the following statements is correct?
A)The loss of producer surplus that is associated with some sellers dropping out of the market as a result of the tax is $30. 
B)The loss of consumer surplus for those buyers of the good who continue to buy it after the tax is imposed is $60. 
C)The loss of consumer surplus caused by this tax exceeds the loss of producer surplus caused by this tax. 
D)This tax produces $200 in tax revenue for the government.

Quizplus · Accepted Answer

The loss of consumer surplus for those buyers who continue to buy the good after the tax is imposed is $60, as it reflects the decrease in consumer surplus due to the higher price they have to pay.

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