Figure 8-21
-Refer to Figure 8-21.Suppose the market is represented by Demand 1 and Supply 1.At first the government places a $3 per-unit tax on this good.Then the government decides to raise the tax to $6 per unit.Compared to the original tax rate,the higher tax will
A)increase tax revenue and increase the deadweight loss from the tax.
B)not change tax revenue and increase the deadweight loss from the tax.
C)decrease tax revenue and increase the deadweight loss from the tax.
D)decrease tax revenue and decrease the deadweight loss from the tax.

Question

Figure 8-21 
-Refer to Figure 8-21.Suppose the market is represented by Demand 1 and Supply 1.At first the government places a $3 per-unit tax on this good.Then the government decides to raise the tax to $6 per unit.Compared to the original tax rate,the higher tax will
A)increase tax revenue and increase the deadweight loss from the tax. 
B)not change tax revenue and increase the deadweight loss from the tax. 
C)decrease tax revenue and increase the deadweight loss from the tax. 
D)decrease tax revenue and decrease the deadweight loss from the tax.

Quizplus · Accepted Answer

The Answer of Figure 8-21 
-Refer to Figure 8-21.Suppose the market is represented by Demand 1 and Supply 1.At first the government places a $3 per-unit tax on this good.Then the government decides to raise the tax to $6 per unit.Compared to the original tax rate,the higher tax will
A)increase tax revenue and increase the deadweight loss from the tax. 
B)not change tax revenue and increase the deadweight loss from the tax. 
C)decrease tax revenue and increase the deadweight loss from the tax. 
D)decrease tax revenue and decrease the deadweight loss from the tax.

Figure 8-21 -Refer to Figure 8-21.Suppose the Market Is Represented by Demand