Figure 8-7 The graph below represents a $10 per unit tax on a good. On the graph, Q represents quantity and P represents price.

-Refer to Figure 8-7.The tax causes producer surplus to decrease by the area
A)D + F.
B)D + F + G.
C)D + F + J.
D)D + F + G + H.

Question

Figure 8-7 The graph below represents a $10 per unit tax on a good. On the graph, Q represents quantity and P represents price.
 
-Refer to Figure 8-7.The tax causes producer surplus to decrease by the area
A)D + F. 
B)D + F + G. 
C)D + F + J. 
D)D + F + G + H.

Quizplus · Accepted Answer

The decrease in producer surplus due to the tax is represented by the area D + F, which is the loss in surplus from the higher cost and reduced quantity sold.

Figure 8-7 the Graph Below Represents a $10 Per Unit