In the market for widgets, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. The equilibrium quantity in the market for widgets is 250 per month when there is no tax. Then a tax of $6 per widget is imposed. As a result, the government is able to raise $750 per month in tax revenue. We can conclude that the after-tax
quantity of widgets is
a. 75 per month.
b. 100 per month.
c. 125 per month.
d. 150 per month.
c
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Does the fact that diamonds, which we do not need to survive, are more expensive than water, which is a necessity, constitute a violation of utility maximization?
What will be an ideal response?
Market failure is a situation in which
A. the market does not provide the ideal or optimal amount of a particular good. B. there are too many buyers but not enough sellers. C. prices are too high for "average" people to buy necessities. D. there is a question over the quality of a product for sale.
Since the Federal Reserve was established in 1913, the U.S. has experienced three periods of high inflation and each was preceded and accompanied by a period of sharp decline in the money supply
a. True b. False Indicate whether the statement is true or false
An increase in firm 1's marginal cost will cause:
A. an upward shift in firm 2's reaction function, resulting in a new Cournot equilibrium where firm 1 is producing a lower quantity and firm 2 is producing a higher quantity. B. a downward shift in firm 1's reaction function, resulting in a new Cournot equilibrium where firm 1 is producing a lower quantity and firm 2 is producing a higher quantity. C. a downward shift in firm 2's reaction function, resulting in a new Cournot equilibrium where firm 1 is producing a higher quantity and firm 2 is producing a lower quantity. D. an upward shift in firm 1's reaction function, resulting in a new Cournot equilibrium where firm 1 is producing a higher quantity and firm 2 is producing a lower quantity.