Scenario 12-3
Suppose Roger and Regina receive great satisfaction from their consumption of cheesecake. Regina would be willing to purchase only one slice and would pay up to $8 for it. Roger would be willing to pay $11 for his first slice, $9 for his second slice, and $5 for his third slice. The current market price is $5 per slice.
-Refer to Scenario 12-3. Assume that the government places a $4 tax on each slice of cheesecake and that the new equilibrium price is $9. Which of the following statements is correct?
A)Roger will bear the full burden of the deadweight loss.
B)Regina will bear the full burden of the deadweight loss.
C)Both Regina and Roger will share the burden of the deadweight loss.
D)There will be no deadweight loss.

Question

Quizplus · Accepted Answer

The Answer of Scenario 12-3
Suppose Roger and Regina receive great satisfaction from their consumption of cheesecake. Regina would be willing to purchase only one slice and would pay up to $8 for it. Roger would be willing to pay $11 for his first slice, $9 for his second slice, and $5 for his third slice. The current market price is $5 per slice.
-Refer to Scenario 12-3. Assume that the government places a $4 tax on each slice of cheesecake and that the new equilibrium price is $9. Which of the following statements is correct?
A)Roger will bear the full burden of the deadweight loss.
B)Regina will bear the full burden of the deadweight loss.
C)Both Regina and Roger will share the burden of the deadweight loss.
D)There will be no deadweight loss.

Scenario 12-3 Suppose Roger and Regina Receive Great Satisfaction from Their Consumption