Refer to Figure 8-1. Suppose the government imposes a tax of P' - P'''. The area measured by J represents

A) consumer surplus after the tax.
B) consumer surplus before the tax.
C) producer surplus after the tax.
D) producer surplus before the tax.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, representing a measure of producer welfare.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, reflecting the economic benefit to consumers.

Tax

An obligatory financial obligation or other form of levy placed on a taxpayer by a government agency to fund government operations and diverse public spending.