Typically, When Government Imposes an Ad Valorem or a Specific

Multiple Choice

Typically, when government imposes an ad valorem or a specific tax on producers,

A) both consumer surplus and producer surplus are reduced.
B) producer surplus is reduced to zero.
C) consumer surplus is reduced to zero.
D) consumer surplus is preserved because producers must pay the tax.
E) producer surplus is preserved because costs are passed on to consumers.