Questions 8-10 refer to the figure below. The figure depicts the market for shrimp.
Price of
shrimp (per
pound)
$22.50
20.00
17.50
15.00
12.50
10.00
7.50
5.00
2.50
0
S
D
250 500 750 1,000 1,250 1,500 1,750
Quantity of shrimp (in pounds)
8. Suppose the market is in equilibrium. Total surplus is equal to:
a. $625
$5,625
c. $7,500
d. $11,250
9. Suppose an excise tax of $10 is imposed on the consumers. Total surplus is now equal to:
$2,500
a. $625
c. $3,125
C
d. $5,625
10. What is the deadweight loss resulting from the above tax?
a. $0
b. $625
c. $1,250
d$2,500