In the diagram above,D represents the original demand curve,S represents the original supply curve,and S' represents the supply curve once a per-unit tax is imposed.
-Refer to the diagram above.Using supply and demand curves S and D,total economic surplus is represented by the area
A) MLI.
B) AKC.
C) MAC.
D) MKC.
E) IJC.

Question

In the diagram above,D represents the original demand curve,S represents the original supply curve,and S' represents the supply curve once a per-unit tax is imposed.
-Refer to the diagram above.Using supply and demand curves S and D,total economic surplus is represented by the area
A) MLI. 
B) AKC. 
C) MAC. 
D) MKC. 
E) IJC.

Quizplus · Accepted Answer

Total economic surplus is represented by the area above the supply curve and below the demand curve. In this case, it is the area of the triangle MKC.

In the Diagram Above,D Represents the Original Demand Curve,S Represents