Suppose Ashley needs a dog sitter so that she can travel to her sister's wedding.Ashley values dog sitting for the weekend at $200.Cami is willing to dog sit for Ashley so long as she receives at least $175.Ashley and Cami agree on a price of $185.Suppose the government imposes a tax of $30 on dog sitting.The tax has made Ashley and Cami worse off by a total of

Question

Quizplus · Accepted Answer

The tax reduces the surplus by $25, as Ashley pays $200 ($185 + $15 tax) and Cami receives $170 ($185 - $15 tax), reducing their combined surplus by $25.

Suppose Ashley Needs a Dog Sitter So That She Can