Scenario 12-2
Suppose Regina and Ben receive great satisfaction from their consumption of cheesecake. Regina would be willing to purchase only one slice and would pay up to $13 for it. Ben would be willing to pay $17 for his first slice, $14 for his second slice, and $10 for his third slice. The current market price is $10 per slice.
-Refer to Scenario 12-2. Assume that the government places a $4 tax on each slice of cheesecake and that the new equilibrium price is $14. How much tax revenue will be generated from sales to Regina and Ben?
A)$0
B)$17
C)$3
D)$14

Question

Quizplus · Accepted Answer

Regina and Ben will each purchase one slice of cheesecake, so the total tax revenue generated from sales to them will be $4 x 2 = $8.

Scenario 12-2 Suppose Regina and Ben Receive Great Satisfaction from Their Consumption