-The above figure shows supply and demand curves for milk.If the government passes a $2 per gallon specific tax,the loss in social welfare will equal
A) b + c + f + g.
B) f + g.
C) b + f.
D) c + g.

Question

-The above figure shows supply and demand curves for milk.If the government passes a $2 per gallon specific tax,the loss in social welfare will equal
A) b + c + f + g. 
B) f + g. 
C) b + f. 
D) c + g.

Quizplus · Accepted Answer

The loss in social welfare due to a tax is represented by the deadweight loss, which is the area of the triangles formed between the supply and demand curves after the tax is imposed. This is typically represented by the areas f + g.

-The Above Figure Shows Supply and Demand Curves for Milk