The following graph illustrates the effect of a per-ticket tax on plane tickets from Boston to Tampa. Use the graph to answer questions 5 to 10.**Graph Details**:- The vertical axis represents the Price (P) of airline tickets in dollars per ticket.- The horizontal axis shows the Quantity (Q) of airline tickets in thousands per day.- There are two supply curves: - $ S_{\text{no tax}} $: The original supply curve without tax. - $ S_{\text{with tax}} $: The supply curve with tax, shifted upwards.- The demand curve (D) intersects both supply curves.- The initial equilibrium without tax is at a price of $200 and a quantity of 3000 thousand tickets per day.- With tax, the price increases to $230, and the quantity decreases to 2850 thousand tickets per day.- The deadweight loss due to the tax is represented by the area between the supply and demand curves where transactions no longer occur.**Question**:What is the deadweight loss due to the tax?Options:- $150 thousand- $3,000 thousand (selected)- $6,000 thousand- $1,114 thousand**Figure 14**Image © author created

Answered: 10) The llowing graph shows the rect or…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A deadweight loss is the price of market inefficiency, which occurs when supply and demand are out of balance. Any shortfall brought on by an inefficient resource allocation is referred to as "deadweight loss," a phrase mostly used in economics.

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