Use the figure below to answer the following question(s).
Figure 4-7

-Refer to Figure 4-7.The supply curve S₁ and the demand curve D indicate initial conditions in the market for gasoline.A $.60-per-gallon excise tax on gasoline is levied.How much revenue does the $.60-per-gallon tax generate for the government?
A)$40 billion
B)$48 billion
C)$50 billion
D)$60 billion

Question

Use the figure below to answer the following question(s).
Figure 4-7
 
-Refer to Figure 4-7.The supply curve S₁ and the demand curve D indicate initial conditions in the market for gasoline.A $.60-per-gallon excise tax on gasoline is levied.How much revenue does the $.60-per-gallon tax generate for the government?
A)$40 billion 
B)$48 billion 
C)$50 billion 
D)$60 billion

Quizplus · Accepted Answer

The tax revenue generated is calculated by multiplying the tax per unit ($0.60) by the quantity sold. The correct choice is based on the quantity sold after the tax is imposed, which is not provided in the question, but the correct answer is $48 billion based on the given options.

Use the Figure Below to Answer the Following Question(s)