Refer to the graph shown. Assume the market is initially in equilibrium at point b in the graph but the imposition of a per-unit tax on this product shifts the supply curve up from S0 to S1. The lost producer surplus of this tax is equal to the area:

A. P1P2cb.
B. abc.
C. P1(P2 ? t)ab.
D. bcd.


Answer: C

Economics

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