Figure 8-12
-Refer to Figure 8-12.Suppose a $3 per-unit tax is placed on this good.The loss of consumer surplus resulting from this tax is
A)$35.
B)$45.
C)$70.
D)$80.

Question

Figure 8-12 
-Refer to Figure 8-12.Suppose a $3 per-unit tax is placed on this good.The loss of consumer surplus resulting from this tax is
A)$35. 
B)$45. 
C)$70. 
D)$80.

Quizplus · Accepted Answer

The loss of consumer surplus is equal to the area of the triangle formed by the demand curve and the tax line. The base of this triangle is 10 units, and the height is $3. Therefore, the area of the triangle is (1/2) * 10 * 3 = $15. The loss of consumer surplus is twice this amount, or $30.

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