Figure 8-5

-Refer to Figure 8-5.What would happen to consumer surplus if the tax were imposed on the buyer
A)It would fall by $900.
B)It would fall by $1800.
C)It would fall by $2700.
D)It would fall by $3600.

Question

Figure 8-5
 
-Refer to Figure 8-5.What would happen to consumer surplus if the tax were imposed on the buyer
A)It would fall by $900. 
B)It would fall by $1800. 
C)It would fall by $2700. 
D)It would fall by $3600.

Quizplus · Accepted Answer

The consumer surplus would fall by $2700 because the tax increases the price buyers pay, reducing the quantity they purchase and thus decreasing the consumer surplus by the area of the tax wedge.

Figure 8-5 -Refer to Figure 8-5.What Would Happen to Consumer Surplus If