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A $10 Per-Unit Tax on Cell Phones Raises the Equilibrium

Question 249

Multiple Choice

A $10 per-unit tax on cell phones raises the equilibrium price paid by consumers by $5. Before the tax, 5,000 cell phones were sold per year. The revenue from the tax is


A) zero.
B) positive but less than $50,000 per year.
C) $50,000 per year.
D) more than $50,000 per year.

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