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Figure: The Gasoline Market
-(Figure: The Gasoline Market) Look at the figure The Gasoline Market. The pretax equilibrium price is $3, and the equilibrium quantity before tax is 20,000 gallons. An excise tax has been levied on each gallon of gasoline supplied by producers, shifting the supply curve upward. The total tax revenue collected by the government is equal to:

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Use the following to answer questions:
Figure: The Gasoline Market 
-(Figure: The Gasoline Market) Look at the figure The Gasoline Market. The pretax equilibrium price is $3, and the equilibrium quantity before tax is 20,000 gallons. An excise tax has been levied on each gallon of gasoline supplied by producers, shifting the supply curve upward. The total tax revenue collected by the government is equal to:

Quizplus · Accepted Answer

The tax revenue is equal to the tax per gallon multiplied by the quantity of gasoline sold. The tax per gallon is $1.50, and the quantity of gasoline sold is 17,500 gallons. Therefore, the total tax revenue is $1.50 x 17,500 = $26,250.

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