Answered
Refer to Scenario 12-1. Suppose the government levies a tax of $6 on each bottle of beer, and the equilibrium price of a bottle of beer increases to $20. Because total consumer surplus has
A) fallen by more than the tax revenue, the tax has a deadweight loss.
B) fallen by less than the tax revenue, the tax has no deadweight loss.
C) fallen by exactly the amount of the tax revenue, the tax has no deadweight loss.
D) increased by less than the tax revenue, the tax has a deadweight loss.
On May 04, 2024