In the diagram, D represents the demand curve for Indian tea exports, while S1 shows the supply curve when a tax is imposed on tea exports. The Indian government abolishes the tax, causing the supply curve to move to S2. Which areas on the diagram show the consequent decrease in tax revenue for the Indian government and the consequent increase in consumer surplus?
- Aloss in tax revenue: x; gain in consumer surplus: w + y
- Bloss in tax revenue: x; gain in consumer surplus: x + z
- Closs in tax revenue: x + y; gain in consumer surplus: z
- Dloss in tax revenue: x + y; gain in consumer surplus: x + z