Figure 8-4

-Refer to Figure 8-4.Which area represents the loss in total welfare resulting from the levying of the tax on the buyer
A)A + B + C
B)D + E + F
C)A + B + D + F
D)C + E

Question

Figure 8-4
 
-Refer to Figure 8-4.Which area represents the loss in total welfare resulting from the levying of the tax on the buyer
A)A + B + C 
B)D + E + F 
C)A + B + D + F 
D)C + E

Quizplus · Accepted Answer

The loss in total welfare due to a tax is represented by the deadweight loss, which is typically shown as the area of the triangle formed between the supply and demand curves, not covered by tax revenue. In this case, it is area C + E.

Figure 8-4 -Refer to Figure 8-4.Which Area Represents the Loss in Total