Refer to the information in Figure 16.5 below to answer the question(s) that follow. Figure 16.5
Figure 16.5 shows the marginal benefits of emitting pollution for the only two chemical companies in an industry, Alpha Chemicals and Beta Chemicals. Before any tax on pollution emissions is imposed, each company views pollution as being free.
-Refer to Figure 16.5. The government decides to impose a tax on pollution emissions to cut total emissions in this industry in half, and based on this decision it has set the tax at $100 per ton of emissions. Following the implementation of this tax, the total amount of tax revenue collected by the government from this tax will be
A) $5,000.
B) $7,500.
C) $10,000.
D) $20,000.

Question

Refer to the information in Figure 16.5 below to answer the question(s) that follow.  Figure 16.5
Figure 16.5 shows the marginal benefits of emitting pollution for the only two chemical companies in an industry, Alpha Chemicals and Beta Chemicals. Before any tax on pollution emissions is imposed, each company views pollution as being free.
-Refer to Figure 16.5. The government decides to impose a tax on pollution emissions to cut total emissions in this industry in half, and based on this decision it has set the tax at $100 per ton of emissions. Following the implementation of this tax, the total amount of tax revenue collected by the government from this tax will be
A) $5,000. 
B) $7,500. 
C) $10,000. 
D) $20,000.

Quizplus · Accepted Answer

If the tax is $100 per ton and the goal is to cut emissions in half, the total tax revenue would be the tax rate multiplied by the new quantity of emissions. Assuming the original emissions were 200 tons, cutting them in half would result in 100 tons. Thus, the revenue would be 100 tons * $100/ton = $10,000.

Refer to the Information in Figure 16