Consumer share of tax incidence

Steps:

• Identify original equilibrium at intersection of supply (S) and demand (D) curves.
• Tax shifts supply to S+tax, creating new equilibrium with higher consumer price (Pc) and lower producer price (Pp).
• Consumer tax burden is rectangle from original price to Pc, across new quantity (Q_tax).
• Label areas: U+V typically spans this rectangle above original price.

Why A is correct:

• U+V equals (Pc - original price) × Q_tax, per tax incidence definition, measuring consumers' higher payments.

Why the others are wrong:

• B: Includes producer burden (X+Y), overstating consumer share.
• C: Adds deadweight loss (X+Y), irrelevant to consumer payments.
• D: Only partial consumer burden (U), excluding full V area.

Final answer: A