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I don't understand how to solve the following question. Every summer, Matt travels by air to see his grandmother. Matt's maximum willingness to pay for
I don't understand how to solve the following question.
Every summer, Matt travels by air to see his grandmother. Matt's maximum willingness to pay for an airline ticket is $260, but the airline requires a minimum of only $100 to fly him. Normally, Matt pays the airline the going market price of $250 per ticket. If the government places a $50 tax on each ticket, raising ticket prices to $270 and causing Matt not to go, what is the deadweight loss created by this tax?
A) $160
B) $150
C) $10
D) $260
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