Refer to the graph. If the government wants to collect tax revenues equal to R $R _ { 2 }$ , then the tax rate
Should be set at
A) $T _ { 2 } \text { or } T _ { 3 }$
B) $T _ { 2 } \text { only. }$
C) $T _ { 4 } \text { only. }$
D) $T _ { 2 } \text { or } T _ { 4 }$

Question

Refer to the graph. If the government wants to collect tax revenues equal to R $R _ { 2 }$ , then the tax rate
Should be set at
A) $T _ { 2 } \text { or } T _ { 3 }$ 
B) $T _ { 2 } \text { only. }$ 
C) $T _ { 4 } \text { only. }$ 
D) $T _ { 2 } \text { or } T _ { 4 }$

Quizplus · Accepted Answer

To collect tax revenues equal to R, we need to find the point where the revenue (R) curve intersects the demand curve. This happens at two points - one where the tax rate is T _{2} and the other where the tax rate is T _{4}. Therefore, either of these tax rates can be set to achieve the desired tax revenue. The other options (A and B) are not correct because they suggest only one tax rate as the solution, but in reality, there are two possible tax rates that will give the desired tax revenue.

Refer to the Graph R2R _ { 2 }R2​ , Then the Tax Rate Should Be Set at A)

Refer to the Graph $R _ { 2 }$ , Then the Tax Rate
Should Be Set at
A)