If the demand curve and the supply curve for a good are straight lines,then the deadweight loss that results from a tariff is represented on the supply-and-demand graph by
A)the area of one triangle.
B)the area of one rectangle.
C)the combined areas of two different triangles.
D)the combined areas of two different rectangles.

Question

Quizplus · Accepted Answer

The deadweight loss resulting from a tariff is the loss of consumer and producer surplus that occurs when the tariff creates a difference between the price paid by consumers and the price received by producers. This results in a reduction in the quantity traded and a loss of efficiency in the market.

On a supply-and-demand graph, the deadweight loss resulting from a tariff is represented by the combined areas of two different triangles, which are located between the original equilibrium price and quantity and the new, higher price and lower quantity after the imposition of the tariff. Therefore, the correct answer is C.

If the Demand Curve and the Supply Curve for a Good