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Question
Use the following information to answer the following questions.
The following graph depicts a market where a tax has been imposed. Pe was the equilibrium price before the tax was imposed, and Qe was the equilibrium quantity. After the tax, PC is the price that consumers pay, and PS is the price that producers receive. QT units are sold after the tax is imposed. NOTE: The areas B and C are rectangles that are divided by the supply curve ST. Include both sections of those rectangles when choosing your answers.
Which areas represent the deadweight loss created as a result of the tax?
a. A + B + C + E + F + G
b. A + C
c. A + B + C + E
d. F + G
e. B + C + F + G
Answer
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