Figure 8-7 The graph below represents a $10 per unit tax on a good. On the graph, Q represents quantity and P represents price.

-Refer to Figure 8-7.After the tax goes into effect,consumer surplus is the area
A)a.
B)B + C.
C)A + B + C.
D)A + B + D + J + K.

Question

Figure 8-7 The graph below represents a $10 per unit tax on a good. On the graph, Q represents quantity and P represents price.
 
-Refer to Figure 8-7.After the tax goes into effect,consumer surplus is the area
A)a. 
B)B + C. 
C)A + B + C. 
D)A + B + D + J + K.

Quizplus · Accepted Answer

Consumer surplus is the area below the demand curve and above the price line. After the tax goes into effect, the price line shifts upward, so the area of consumer surplus decreases. The area that remains is the area below the demand curve and above the new price line, which is area A.

Figure 8-7 the Graph Below Represents a $10 Per Unit