Use the figure below to answer the following question(s).
Figure 4-10
-Figure 4-10 shows the market for a good before and after an excise tax is imposed. What does the triangular area C represent?
A) the deadweight loss accompanying the tax
B) the tax revenue derived from sellers
C) the tax revenue derived from buyers
D) the total tax revenue generated by the tax

Question

Use the figure below to answer the following question(s).
Figure 4-10 
-Figure 4-10 shows the market for a good before and after an excise tax is imposed. What does the triangular area C represent?
A) the deadweight loss accompanying the tax 
B) the tax revenue derived from sellers 
C) the tax revenue derived from buyers 
D) the total tax revenue generated by the tax

Quizplus · Accepted Answer

The triangular area C represents the deadweight loss, which is the loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved due to the tax.

Use the Figure Below to Answer the Following Question(s)