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Zoe, Chloe, and Brody each like to read novels. The current mystery thriller costs $10. Zoe values it at $15, Chloe at $13, and Brody
Zoe, Chloe, and Brody each like to read novels. The current mystery thriller costs $10. Zoe values it at $15, Chloe at $13, and Brody at $11. Suppose that if the government taxes books at 50 cents each the selling price rises to $10.50. A consequence of the tax is that a. consumer surplus shrinks by $7.50 and tax revenues increase by $7.50, so there is no deadweight loss. b. consumer surplus shrinks by $9.00 and tax revenues increase by $1.50, so there is a deadweight loss of $7.50. c. consumer surplus shrinks by $1.50 and tax revenues increase by $1.50, so there is no deadweight loss. d. consumer surplus shrinks by $7.50 and tax revenues increase by $1.50, so there is a deadweight loss of $6
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