Question: The vertical distance between points A and B represents a tax in the market. 48 40 Supply 36 32 PRICE 28 24 20 16 12

The vertical distance between points A and B represents a tax in the market. 48 40 Supply 36 32 PRICE 28 24 20 16 12 8 4 Demand 5 10 15 20 25 30 35 40 45 50 55 60 QUANTITY Cefer to Figure 8-3. As a result of the tax, consumer surplus decreases from $200 to $80. producer surplus decreases from $200 to $145. the market experiences a deadweight loss of $80. total surplus increases from $180 to $200

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