Figure 8-6

-Refer to Figure 8-6.What was consumer surplus before the tax was levied
A)$45
B)$75
C)$125
D)$150

Question

Figure 8-6
 
-Refer to Figure 8-6.What was consumer surplus before the tax was levied
A)$45 
B)$75 
C)$125 
D)$150

Quizplus · Accepted Answer

Before the tax was levied, consumer surplus was equal to the area above the price line and below the demand curve, up to the quantity sold. In this case, that area is a triangle with a base of 10 and a height of 25. Therefore, consumer surplus before the tax was $125 (0.5 x 10 x 25).

Figure 8-6 -Refer to Figure 8-6.What Was Consumer Surplus Before the Tax