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.One effect of the tax is to
A)reduce consumer surplus from $60 to $24.
B)reduce producer surplus from $32 to $8.
C)create a deadweight loss of $24.
D)All of the above are correct.

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.One effect of the tax is to
A)reduce consumer surplus from $60 to $24. 
B)reduce producer surplus from $32 to $8. 
C)create a deadweight loss of $24. 
D)All of the above are correct.

Quizplus · Accepted Answer

The Answer of 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.One effect of the tax is to
A)reduce consumer surplus from $60 to $24. 
B)reduce producer surplus from $32 to $8. 
C)create a deadweight loss of $24. 
D)All of the above are correct.

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