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

-Which 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 following questions.
The following graph depicts a market where a tax has been imposed.P e was the equilibrium price before the tax was imposed,and Q e was the equilibrium quantity.After the tax,P C is the price that consumers pay,and P S is the price that producers receive.Q T units are sold after the tax is imposed.NOTE: The areas B and C are rectangles that are divided by the supply curve S T .Include both sections of those rectangles when choosing your answers.
 
-Which 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 areas where the tax causes a decrease in the quantity traded and an increase in the price paid by consumers or a decrease in the price received by producers. These areas typically include the triangles or rectangles formed between the new and old equilibrium points on a supply and demand graph, indicating the deadweight loss and the redistribution of surplus from consumers and producers to the government.

Use the Following Information to Answer the Following Questions