For widgets, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. A tax of $15 per unit is imposed on widgets. The tax reduces the equilibrium quantity in the market by 250 units. The deadweight loss from the tax is

A) $3,750.
B) $1,875.
C) $132.5.
D) $117.5.

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium for a good or a service is not achieved or is not achievable, leading to a suboptimal allocation of resources.

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the price where supply and demand are equal.

Tax

An unavoidable fiscal exaction or different type of contribution enforced by a governmental faction on a taxpayer, intended to support the financing of governmental operations and a range of public service outlays.