Figure 57 Figure 5

Multiple Choice

Figure 5.7 Figure 5.7 shows the market for beer.The government plans to impose a unit tax in this market.
-Refer to Figure 5.7.As a result of the tax, is there a loss in consumer surplus?

A) Yes, because consumers are paying a price above the economically efficient price.
B) No, because the producer pays the tax.
C) No, because the market reaches a new equilibrium.
D) No, because consumers are charged a lower price to cover their tax burden.