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the vertical distance between points a and b represents a tax in the market 12 11 10 9 Supply 8 PRICE 5 3 B 2

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the vertical distance between points a and b represents a tax in the market
12 11 10 9 Supply 8 PRICE 5 3 B 2 1 Demand 0.5 1.0 1.5 2.0 2.5 3.0 3.5 40 45 50 55 6.0 QUANTITY Refer to Figure 8-2. The loss of producer surplus associated with some sellers dropping out of the market as a result of the tax is SO $1. $2 $3

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