Figure 8-12
-Refer to Figure 8-12.Suppose a $3 per-unit tax is placed on this good.The amount of deadweight loss resulting from this tax is
A)$7.50.
B)$15.00.
C)$22.50.
D)$45.00.

Question

Figure 8-12 
-Refer to Figure 8-12.Suppose a $3 per-unit tax is placed on this good.The amount of deadweight loss resulting from this tax is
A)$7.50. 
B)$15.00. 
C)$22.50. 
D)$45.00.

Quizplus · Accepted Answer

The deadweight loss from a tax is calculated as 0.5 * tax * reduction in quantity sold. Without the figure, we assume the reduction in quantity sold is 5 units, leading to a deadweight loss of 0.5 * 3 * 5 = $7.50.

Figure 8-12 -Refer to Figure 8-12.Suppose a $3 Per-Unit Tax Is Placed