When a tax is imposed on some good,the lost consumer surplus and producer surplus both typically end up as

Question

Quizplus · Accepted Answer

When a tax is imposed on a good, it creates a deadweight loss, which represents the loss of consumer and producer surplus that occurs due to the distortion in the market. This lost surplus does not benefit anyone and is not used to lower prices or increase output. Instead, it generates tax revenue for the government. Therefore, the lost consumer surplus and producer surplus typically end up as tax revenue and deadweight loss.

When a Tax Is Imposed on Some Good,the Lost Consumer