Refer to Scenario 19.4 below to answer the question(s) that follow.
SCENARIO 19.4: Suppose demand for widgets is given by the equation P = 10 - 0.25Q. Originally, the price of the good is $5 per unit. When a tax of $1 per unit is imposed, the price of the good rises to $6 per unit.
-Refer to Scenario 19.4. Prior to the imposition of the tax consumers purchased ________ widgets and after the tax was imposed they purchased ________ widgets.

Question

Quizplus · Accepted Answer

Before the tax, the price is $5. Plugging this into the demand equation gives $5 = 10 - 0.25Q, solving for Q gives Q = 20. After the tax, the price is $6. Plugging this into the demand equation gives $6 = 10 - 0.25Q, solving for Q gives Q = 16.