Final answer:
The correct answer is option (b): the tax decreased the equilibrium quantity of the good from 3,200 to 1,600 units because the total welfare loss divided by the tax per unit indicates a decrease of 2,000 units.
Step-by-step explanation:
When suppose a tax of $20 per unit is imposed on a good, the equilibrium price and quantity in the market are affected. The imposition of the tax creates a wedge between the price consumers pay and the price producers receive. Since the tax decreases consumer surplus and producer surplus by $18,000 each and the deadweight loss of the tax is $4,000, we can compute the changes in the equilibrium quantity of the good. The total welfare loss due to the tax is the sum of the loss in consumer and producer surplus plus the deadweight loss, which amounts to $40,000 ($18,000 + $18,000 + $4,000). Given a tax of $20 per unit, this implies that the decrease in the quantity traded due to the tax is 2,000 units (since $40,000 divided by $20 equals 2,000). Therefore, option (b) is correct: The equilibrium quantity of the good decreased from 3,200 units to 1,600 units after the tax was imposed.