Figure 8-1
-Refer to Figure 8-1. Suppose the government imposes a tax of P'' - P. The area measured by J + K + I represents
A)consumer surplus after the tax.
B)consumer surplus before the tax.
C)producer surplus after the tax.
D)producer surplus before the tax.

Question

Figure 8-1 
-Refer to Figure 8-1. Suppose the government imposes a tax of P'' - P. The area measured by J + K + I represents
A)consumer surplus after the tax. 
B)consumer surplus before the tax. 
C)producer surplus after the tax. 
D)producer surplus before the tax.

Quizplus · Accepted Answer

The area J + K + I represents the consumer surplus before the tax, as it is the area above the price level and below the demand curve, indicating the total benefit consumers receive before the tax is imposed.

Figure 8-1 -Refer to Figure 8-1. Suppose the Government Imposes a Tax