This graph depicts a tax being imposed,causing demand to shift from D₁ to D₂.The distance AC in the graph shown represents all of the following except the:

Question

Quizplus · Accepted Answer

The distance AC represents the "tax wedge" or the difference between what the consumer pays and what the seller receives. It does not represent the amount of the tax or the total tax revenue generated for the government by imposing the tax.

This Graph Depicts a Tax Being Imposed,causing Demand to Shift