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 producer surplus as a result of the tax is
A)$24.
B)$3.
C)$12.
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 producer surplus as a result of the tax is
A)$24. 
B)$3. 
C)$12. 
D)$4.

Quizplus · Accepted Answer

The loss of producer surplus due to the tax is represented by the area of the triangle formed between the supply curve, the price after tax, and the original price. This area is calculated as 0.5 * base * height, which equals $12.

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