Exhibit 19-6

-Refer to Exhibit 19-6. Suppose the three equilibrium quantities are 700, 800, and 900, and the two other equilibrium prices are $2.20 and $2.75. What is the change in total revenue when a per-unit tax shifts S₁ to S₂, given that D₂ is the relevant demand curve?

Question

Exhibit 19-6

Exhibit 19-6 -Refer to Exhibit 19-6. Suppose the three equilibrium quantities are 700, 800, and 900, and the two other equilibrium prices are $2.20 and $2.75. What is the change in total revenue when a per-unit tax shifts S1 to S2, given that D2 is the relevant demand curve? A) $260 B) -$260 C) $900 D) $700 E) -$200

Exhibit 19-6 -Refer to Exhibit 19-6. Suppose the three equilibrium quantities are 700, 800, and 900, and the two other equilibrium prices are $2.20 and $2.75. What is the change in total revenue when a per-unit tax shifts S<sub>1</sub> to S<sub>2</sub>, given that D<sub>2</sub> is the relevant demand curve? A) $260 B) -$260 C) $900 D) $700 E) -$200

-Refer to Exhibit 19-6. Suppose the three equilibrium quantities are 700, 800, and 900, and the two other equilibrium prices are $2.20 and $2.75. What is the change in total revenue when a per-unit tax shifts S₁ to S₂, given that D₂ is the relevant demand curve?

Quizplus · Accepted Answer

The change in total revenue when a per-unit tax shifts the supply curve and results in a move from one equilibrium point to another can be calculated by comparing the total revenues before and after the tax. Given the quantities (700, 800, 900) and prices ($2.20, $2.75), we can calculate the total revenues at each point and then find the difference due to the shift. The decrease in total revenue by $260 indicates that the tax has led to a reduction in the overall revenue generated, hence option B (-$260) is correct.

Exhibit 19-6 ​

Exhibit 19-6