Use the following information to answer the next fifteen questions.
The following graph depicts a market where a tax has been imposed. Pₑ was the equilibrium price before the tax was imposed, and Qₑ was the equilibrium quantity. After the tax, PC is the price that consumers pay, and PS is the price that producers receive. QT units are sold after the tax is imposed. NOTE: The areas B and C are rectangles that are divided by the supply curve ST. Include both sections of those rectangles when choosing your answers.

-What areas represent the total lost consumer and producer surplus (i.e.,social welfare) as a result of the tax?

Question

Use the following information to answer the next fifteen questions.
The following graph depicts a market where a tax has been imposed. Pₑ was the equilibrium price before the tax was imposed, and Qₑ was the equilibrium quantity. After the tax, PC is the price that consumers pay, and PS is the price that producers receive. QT units are sold after the tax is imposed. NOTE: The areas B and C are rectangles that are divided by the supply curve ST. Include both sections of those rectangles when choosing your answers.
 
-What areas represent the total lost consumer and producer surplus (i.e.,social welfare) as a result of the tax?

Quizplus · Accepted Answer

The total lost consumer and producer surplus due to a tax is represented by the deadweight loss, which is typically the areas B + C + F + G. These areas represent the loss in social welfare because they are the trades that no longer occur due to the tax.

Use the Following Information to Answer the Next Fifteen Questions