Figure 8-2
The vertical distance between points C and D represents a tax in the market.

-Refer to Figure 8-2. The loss of consumer surplus as a result of the tax is
A)$12.
B)$8.
C)$18.
D)$4.

Question

Figure 8-2
The vertical distance between points C and D represents a tax in the market.
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-Refer to Figure 8-2. The loss of consumer surplus as a result of the tax is
A)$12. 
B)$8. 
C)$18. 
D)$4.

Quizplus · Accepted Answer

The loss of consumer surplus due to a tax is represented by the area between the demand curve and the price consumers pay after the tax, minus the area they would have paid without the tax. This typically includes the area of a triangle or a rectangle formed due to the increase in price caused by the tax. Without seeing Figure 8-2, the correct answer is inferred based on the common understanding of how taxes affect consumer surplus in economic models.

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