Figure 8-2
The vertical distance between points A and B represents a tax in the market.
-Refer to Figure 8-2.The amount of tax revenue received by the government is
A)$2.50.
B)$4.
C)$5.
D)$9.

Question

Figure 8-2
The vertical distance between points A and B represents a tax in the market. 
-Refer to Figure 8-2.The amount of tax revenue received by the government is
A)$2.50. 
B)$4. 
C)$5. 
D)$9.

Quizplus · Accepted Answer

The tax revenue received by the government is equal to the tax per unit (which is the distance between points A and B) multiplied by the quantity sold (which is the distance between points B and C). In this case, the tax per unit is $0.50 (as shown on the vertical axis) and the quantity sold is 10 units (as shown on the horizontal axis). Therefore, the tax revenue received by the government is $0.50 x 10 units = $5. Choice C is the correct answer.

Figure 8-2 the Vertical Distance Between Points a and B Represents a Represents